BOISE — After a harsh start last spring, net farm income in Idaho rose 15-percent last year.
The year-end 2017 receipts showed that Idaho net farm income blasted past the USDA’s projected 3- percent increase for all US agriculture.
University of Idaho economist Garth Taylor testified in front of the House Agriculture Committee and gave his annual “Financial Condition of Idaho Agriculture” report.
“Idaho is on a different track than national agriculture and I’m always amazed,” said Taylor. Net farm income is a farmers revenue minus expenses and that represents the farmer’s bottom line.
According to the report farm input expenses were up 2-percent but net farm income still climbed to15-percent.
“Its because we had a 5-percent farm revenue increase across the board. That's the first increase in net farm income in four years,” said Taylor, "Resulting in $1.9 billion in total net farm income for Idaho farmers last year."
Taylor told the committee that dairy leads the way in Idaho.
“A third of our cash receipts come from dairy. “It’s the 900-pound gorilla in the Idaho economy. It’s not famous potatoes, now its famous dairy that’s driving the state,” said Taylor.
Dairy, cattle, and potatoes are the state’s main commodities in terms of income dollars.
“2017 showed solid improvement over last year in terms of cash receipts,” according to Taylor. “The improvement was led by our two biggest commodities, potatoes and dairy. And then there are cattle, that’s driving income as well but clearly, net earnings in dairy drove profits, yet dairy is still below historical averages.”
Taylor’s report also revealed that Idaho net farm income dropped the three previous years — 3-percent in 2014, 9-percent in 2015 and 8-percent in 2016.
“Some farmers say this is the best year in the past 10,” Taylor told the committee “Potatoes and onions helped a lot this year.”
But the report also revealed that low commodity prices continue to threaten the bottom line on the farm.
“After the past three years, we’ll take it,” said Taylor.
Taylor’s report had peaks, valleys, and surprises, like this gem: Idaho’s net farm income has grown 100 percent more than the US since 1997.
“Like I said, we’re on a different track in Idaho than the rest of the nation. Far different,” Taylor said.
Taylor says 60 percent of our cash receipts in Idaho come from livestock and prices were good. “When you start to add in the hay, feed barley, corn, and other feedstocks we’re up 70-80 percent. Idaho’s cash receipts are also driven by the livestock industry.”
Looking to 2018 Dr. Taylor says there are also points of concern in the livestock sector.
“Hay is going to be down and it follows corn and we have surplus stocks of grain out there and that always means the feed is going to be down. That means farmers this spring will look to spuds for a cash crop and you know what happens,” said Taylor. “Prices will be down and it’s going to take a lot to get back where we were in 2017.”
Milk prices started flat in January and have not improved. Taylor says a few dairies are canceling contracts and there have been herd liquidations. “This may be the first time in 2018 where we may see a reduction in herd sizes. It'll be at least the second half of 2018 before we see a turn around in milk prices,” said Taylor.
The UI report revealed Idaho farm expenses topped $6.24 billion in 2017, that's up 2-percent over the $6.14 billion total in 2016.
Also, a 1-percent decrease in costs for farm origin inputs and capital consumption were offset by a 1-percent increase in contract labor costs, a 7 percent increase in property taxes and fees and a 5 percent increase in payments to stakeholders.