Wednesday, January 13, 2010

Farm Economy News

Steve Ritter photo
Idaho agricultural production slips 17% to $5.4 billion. Crop diversity helps

Moscow--Net farm income fell dramatically in 2009 according to a report just released by the University of Idaho. According to university economists, net farm income, the real measure of how Idaho farmers and ranchers performed, fell 47% from $1.904 billion in 2008, to just $1.018 billion in 2009.

"When you take dairy out of the stats, it wasnt too bad of a year," said wheat farmer Robert Blair of Kendrick. "The report is a little better at second glance, but it still worries me."

"Agriculture as a diverse industry is a strong stabilizing force in Idaho's overall economy," says college dean John Hammel, "while individual growers experience volatility in the commodity market prices and increasing costs of inputs, both factors that affect their net incomes."

It was the biggest decline in 40 years, reflecting a tough year for the state's dairy, livestock and some crop sectors. Even though much of the double-digit increases from the prior two years disappeared, receipts remain 16.6% above 2006. But expenses, things like fuel and fertilizer jumped 27% during the same time period. Some of the decline in net farm income in 2009 can be attributed to this increase in production expenses says Bob Smathers, Idaho Farm Bureau Regional Manager in Northern Idaho. Net Farm Income is the return to farm operators for their labor, management and capital after all production expenses have been paid.

Farm jobs, one of the most stable parts of Idaho agriculture is suffering as growers struggle to adjust skyrocketing expenses. But while there is room for labor force reductions, cutting back labor, fuel and chemicals can only go so far, since cattle must continue to be fed and crops tended.

"Can we maintain the status quo to get through these tough economic times, because market prices are flat, you start looking at this, its darned scary," said Blair.
Among crops, potatoes ranked as sales leader, bringing home $796 million, up $15 million, or 2 percent, from 2008.Onions, sugar beets up. Sugar beet cash receipts provided the sweet spot among crops. Revenue soared 70 percent to $252 million, a $105 million increase from the previous year. Onion producers enjoyed a 43 percent increase in cash receipts to $43 million from $30 million in 2008. But livestock cash receipts fell 23 percent in 2009. Milk cash receipts dropped $698 million to $1.4 billion, the lowest total since 2004. Cattle and calf sales, primarily beef, dipped nearly $100 million to $1.09 billion, an 8 percent decline.

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