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Idaho net farm income set record in 2020

By Sean Ellis

Idaho Farm Bureau Federation

BOISE – Total net farm income in Idaho reached a record level of $3.53 billion in 2020, according to estimates by University of Idaho agricultural economists. 

If realized, that would be a 38 percent increase over the $2.55 billion level reached in 2019, which was also a record year in Idaho for net farm income, which is revenues minus costs and is the famer’s bottom line. 

The main reason for the big increase in net farm income last year was the financial assistance provided to agricultural producers across the country through the USDA’s Coronavirus Food Assistance Program.

The money was approved by Congress to assist farmers and ranchers that were impacted financially by the government-ordered shutdowns due to the COVID-19 outbreak. Billions of dollars in CFAP payments were made to producers around the United States.

Idaho farmers and ranchers received an estimated $490 million in CFAP payments in 2020, UI Agricultural Economist Garth Taylor told lawmakers Jan. 7 during a presentation highlighting the state of Idaho’s agricultural economy. 

During his presentation, Taylor outlined major points contained in UI’s annual Financial Condition of Idaho Agriculture report. The 2020 version was unveiled during a meeting of the Idaho Legislature’s Economic Outlook and Revenue Assessment Committee.

One of the main points Taylor made to lawmakers is that Idaho would have set a record for net farm income even without the CFAP payments. 

“Idaho, even without (those) payments, would have reported a record high in net farm income” last year, he said. “That’s a sign of health in Idaho agriculture.”

According to projections contained in the 2020 Financial Condition of Idaho Agriculture report, farm cash receipts – this is the revenue farmers and ranchers receive for their commodity – totaled $8.5 billion in Idaho last year, up 6 percent over 2019 and the second highest level ever, behind only the $8.8 billion total reached in 2014. 

Total Idaho farm revenues, including cash receipts, inventory changes, the estimated value of home consumption, government payments and machine hire and custom work, increased 10 percent to $9.6 billion last year. 

Total expenses are projected to have decreased 2 percent last year, putting total Idaho net farm income at $3.53 billion in 2020, which is $978 million higher than last year’s record. 

Idaho Farm Bureau Federation President Bryan Searle, a farmer from Shelley, said the big increase in net farm income in Idaho is certainly welcome news. But he also cautioned that not every producer received CFAP payments and many farmers and ranchers face challenging economic times. 

“Not every producer received those CFAP payments and there are still a lot of economic challenges on the farm,” he said. 

UI Agricultural Economist Ben Eborn, one of the report’s co-authors, echoed those sentiments.

“On the whole, Idaho agriculture did great last year,” he said. “But there are still plenty of individual farmers and ranchers that are struggling.”

USDA forecasts that net farm income across the United States increased 43 percent to $120 billion in 2020. As was the case in Idaho, the main reason for the big increase in U.S. net farm income is due to the CFAP payments. 

Taylor told lawmakers that farm income is extremely volatile and he showed them a chart demonstrating the wild swings in farm income recorded in Idaho from quarter to quarter over the past 15 years. 

In six of the past 10 years, Idaho has experienced double-digit swings in net farm income. 

But, he added, the good news is that agriculture acts as a stabilizing force in local communities and in the state’s overall economy because farmers and ranchers spend about the same amount of money on labor and other input costs regardless of whether they had a good financial year or not.

“It doesn’t matter if (farm-level) milk prices are at $12 a hundredweight or $22, you still  have to use the same amount of labor to milk a cow and the same amount of feed as well,” Taylor said. “Agriculture is a very stabilizing force in your economy.”

According to a report by UI ag economists released last year, agriculture directly and indirectly accounts for one of every eight jobs in the state, 13 percent of the state’s total gross domestic product and 18 percent of total sales in Idaho.

Idaho’s farming GDP has grown by 210 percent since 1997 in inflation-adjusted terms, Taylor said, while the state’s overall GDP has grown 100 percent during that time. 

“Agriculture is really a bright spot in Idaho,” he said. 

According to the Financial Condition of Idaho Agriculture report, milk remained the No. 1 farm commodity in Idaho in 2020 in terms of cash receipts. The state’s dairy operations brought in $2.9 billion in farm cash receipts last year, up 2 percent over 2019. 

Farm-level milk prices in Idaho averaged 2 percent lower in 2020 but production was up 4 percent and Idaho ranked No. 3 in the nation in total milk output.

Farm cash receipts from cattle and calves in Idaho are projected at $1.6 billion in 2020, down 6 percent from 2019. According to the report, “disruption in the supply chain, packing plants and export markets caused by COVID-19 put downward pressure on cattle prices most of the year.” 

Potatoes remained Idaho’s No. 1 crop in total revenue and the state’s spud farmers brought in an estimated $1.1 billion in farm cash receipts last year, a 13 percent increase over 2019.

Idaho potato production was up an estimated 7 percent last year and the average price for Idaho spuds was estimated to be up 6 percent, to $8.80 per hundredweight. 

Total farm cash receipts for wheat in Idaho were projected at $525 million in 2020, up 17 percent.

Production was up 14 percent while the average price was down 3 percent.

Cash receipts for Idaho hay are projected to be down 9 percent in 2020 to $427 million. Total hay production in the state was down 0.5 percent and the average price of $153 per ton was down $6 from 2019. 

The total value of hay production in Idaho is estimated at $777 million in 2020 but 45 percent of the hay produced in Idaho is used on the farm where it was produced. That hay used on the farm does not show up as cash receipts.

Total farm cash receipts for sugar beets produced in Idaho in 2020 are projected to be $366 million, up 29 percent over 2019. Production is estimated to be 7 percent higher than in 2019 and the average beet price of $53 a ton is 9 percent higher. 

Farm cash receipts from Idaho barley are projected at $274 million in 2020, up 10 percent from 2019. Idaho barley production last year was nearly equal to 2019 and the average barley price is estimated to be 3 percent lower.