Idaho farmers see production increase, revenue decrease in 2018
BOISE — Despite drops in prices, cash receipts for Idaho farmers stayed about the same in 2018 due to increases in production.
"Our prices are terrible ... but this year we had a really good year," University of Idaho Associate Professor Garth Taylor told the Senate Agricultural Affairs Committee Thursday. "Those farmers were out there doing the job."
Cash receipts in 2018 were $7.18 billion, Taylor said, compared to $7.2 billion in 2017. But net farm income, he said, dropped from $1.23 billion in 2017 to $900 million, due to expenses increasing more than expected.
Dairy and beef cattle represent the biggest chunk of Idaho's agricultural economy — a third of this revenue comes from milk, 23 percent from cattle, 7 percent is hay, and the 7 percent from "other crops," Taylor said, includes a good deal of silage and feed corn. Dairy in particular has grown rapidly over the past 20 years.
"We're very much a livestock-oriented state," he said.
Potatoes are the biggest food crop, representing 12 percent of Idaho's agricultural revenues.
Revenue from 2018 crops was $2.9 billion, a 5 percent increase, and $4.3 billion from livestock, a 4 percent drop. Potato income dropped 4 percent but revenue from barley, wheat, sugarbeets and especially hay were all up.
Agriculture is the biggest single sector in Idaho, representing 20 percent of the state's output, 14 percent of jobs and 16 percent of gross domestic product according to Taylor's presentation. Idaho is the fourth-biggest agricultural state in the country, behind the Dakotas and Nebraska. Taylor said agriculture brings outside money into Idaho, since so much of what is produced is sold out-of-state.
“It is new dollars, exports that create the ag economy,” he said. “When new dollars circulate around, that creates this multiplier effect."
Idaho's agricultural exports increased sharply from 2000 to 2011. In 2018, according to Taylor's presentation, exports brought in a little more than $2 billion, up slightly from 2017 but down from its peaks in 2013 and 2014. The biggest buyers of Idaho farm exports are Canada and Mexico, with China a distant third. A quarter to a third of Idaho's agricultural products are exported abroad, with potatoes and dairy leading.
President Donald Trump has been pursuing a more protectionist trade policy than past presidents, and Taylor talked a bit about the impact of this, saying tariffs and trade disputes with China have hit farmers particularly hard. Agricultural products are the only area where the U.S. has an export surplus with China, making it the only area where China can retaliate effectively. And, he said, China has about a billion farmers, so raising tariffs on agricultural products can also protect Chinese farmers.
Taylor said tariffs can lead farmers to find other markets. He gave the example of when China banned U.S. beef due to concerns about mad cow disease. Within a few years, Vietnam replaced China as the biggest importer of American beef.
"Tariffs are like price controls, and price controls never have worked," Taylor said. "They just do not work well in economics. People seem to go around them."
Taylor also said Idaho is less affected by the Farm Bill than some states due to the types of crops grown and animals raised here. Federal payments to Idaho agriculture have fallen sharply over the past decade, and as of 2017 they represented 4.6 percent of Idaho farm income, down from a high of 16 percent in 2005, according to a University of Idaho report. By contrast, federal payments made up 17.7 percent of farm income nationally in 2017.
“Idaho farmers do not farm the government,” Taylor said. “That is very minimal. … It’s a small fraction of what we get in revenues in Idaho. We don’t have rice or soybeans or corn for grain or the big crops that are (heavily subsidized)."