Boise, Idaho – When it comes to population, Idaho is a very small state. When it comes to agriculture, Idaho punches way above its weight.
Compared to much bigger states, “Idaho is a very small economy, but we have big agriculture,” University of Idaho Agricultural Economist Garth Taylor told lawmakers in January.
According to Taylor, Idaho is the fifth-largest agricultural state in the nation when it comes to a state’s gross domestic product generated from agriculture as a percentage of that state’s total GDP.
“We are the fifth-largest ag state in the nation in ag GDP percentage terms,” he said.
GDP measures the value of all goods and services produced.
Taylor said that according to U.S. Department of Commerce and U.S. Bureau of Economic Analysis data, Idaho farm GDP grew by 120 percent from 1997-2021. During that same period, total Idaho GDP grew 80 percent and GDP from Idaho food manufacturing grew by 70 percent.
“Agriculture – farmers, not food processing – is growing faster than the state’s economy in GDP terms,” Taylor told members of the Idaho Legislature’s Joint Legislative Economic Outlook and Revenue Assessment Committee. “It is a fast-growing industry.”
Total Idaho net farm income grew by 150 percent in inflation-adjusted dollars from 1997 to 2022, Taylor added. Total U.S. net farm income grew by 80 percent during that same period.
Taylor said the significant growth in the state’s agricultural industry is a product of the ag-friendly climate that exists in Idaho, especially compared to some other states.
“The climate toward agriculture is very favorable in Idaho, especially compared to some neighboring states,” he told Idaho Farm Bureau Federation. “Idaho doesn’t have an aversion to production agriculture.”
Taylor said he constantly sees negative stories about how some neighboring states are doing things to hamper agriculture.
“That doesn’t happen in Idaho,” he said. “It’s a very ag-friendly state.”
That, he added, has allowed agriculture to be an engine for growth in Idaho.
“We’re not only ag friendly but we’re also ag friendly to large farms and that’s where our GDP growth is,” Taylor said.
He told lawmakers Idaho agriculture had a record year in 2022 when it comes to total farm cash receipts, which is the money farmers or ranchers receive for their commodity.
However, he added, Idaho also set a record for total farm production expenses last year.
The record for total revenue happened despite the fact that total federal government payments to farmers and ranchers in Idaho declined by a large margin in 2022 compared with 2021.
In their annual “The Financial Condition of Idaho Agriculture” report, University of Idaho economists estimate that federal government payments to Idaho farmers and ranchers totaled $185 million in 2022, which is 36 percent lower than the 2021 total, which included a substantial amount of COVID-relief payments.
Taylor said federal payments to Idaho agriculture are expected to decline or stabilize moving forward and Idaho is estimated to have received only about 1 percent of total government payments to U.S. agriculture in 2022.
Overall, that $185 million total represented only 1.6 percent of the total revenue that Idaho farmers and ranchers generated in 2022.
“Idaho farmers don’t farm the government,” Taylor told lawmakers. “(Government payments are) not a big part of agriculture in Idaho.”
He said that overall, Idaho farmers and ranchers have pretty clean balance sheets. But he did caution that high inflation is a major concern for agricultural producers and he reminded legislators it’s what severely harmed many producers in the 1980s.
“This is the No. 1 thing to watch for – inflation,” he said.
“It’s probably a primary worry among producers,” U of I Agricultural Economist Brett Wilder told Idaho Farm Bureau Federation.