Idaho farm GDP has grown 210 percent since 1997

By Sean Ellis

Idaho Farm Bureau Federation

POCATELLO – USDA data shows that farmers and ranchers are the main driver behind the significant growth in the state’s overall agricultural sector over the past few decades.

Idaho’s food processing industry is doing well but farmers and ranchers themselves are driving the growth in agricultural gross domestic product in Idaho.

Gross domestic product, the total value of all goods and services produced, is the broadest measure of growth in an economy.

According to USDA’s Bureau of Economic Analysis, the state’s farm GDP grew by 210 percent from 1997-2019. During the same time, food processing GDP in Idaho grew by 20 percent.

“Twenty percent growth for the food processing industry is a great number,” said University of Idaho Agricultural Economist Ben Eborn, who calculated those numbers from BEA data. “But that 210 percent GDP growth for the farming sector is unreal. That’s pretty amazing.”

GDP growth in the state’s overall agricultural sector is mostly generated by what UI Agricultural Economist Garth Taylor likes to call “Grandma and grandpa on a tractor.”

“A lot of people say it’s the food processing sector that is driving growth in Idaho’s agricultural industry,” Taylor said. “No, it’s the farmer.”

Eborn also calculated that farm GDP in Washington state grew by 130 percent from 1997-2019 and it grew by 70 percent in Oregon during that time. Food processing GDP in both those states grew by about 25 percent during that time.

“It’s stodgy old grandma and grandpa on a tractor that is (driving agricultural GDP growth) in all three of those states,” Taylor said.

He said a main takeaway from the data is that food processing GDP is growing at about the same rate in all three states but Idaho’s farming GDP is growing much faster than it is in Washington and Oregon.

The main reason for that, Taylor said, is the rapid growth of Idaho’s dairy industry, which is the top sector of the state’s agricultural industry in terms of farm cash receipts, which is the revenue a farmer or rancher receives for their commodity.

As an example of how much the state’s dairy industry has grown over the past two decades, the total value of milk production in Idaho in 1997 was $639 million. Last year that total was $2.9 billion.

“The reason for much of that (farm GDP) growth in Idaho is a four-letter word: Milk,” Taylor said. “It’s the growth of the dairy industry in the state that’s pushing that. Technology is allowing dairy producers to get more milk out of their cows.”

Eborn said expansion of the dairy industry and increases in technology that have made farmers and ranchers more efficient over the years is what is pushing the GDP growth in the state’s farming sector.

“We have added 367,000 milk cows since 1997 – a 137 percent increase – and they are a lot more productive than they were 20-30 years ago,” he said. “And it’s the same thing with each of the crops we produce here. We get more yield per acre from every crop. Every crop is becoming more productive and efficient.”

Whether it’s the state’s iconic potato crop or some other ag commodity, “The adoption of technologies provides more value-added for less input and that is really what GDP is measuring,” Taylor said.