Economist: Idaho agriculture is big and growing

By Sean Ellis

Idaho Farm Bureau Federation

BOISE – When it comes to total revenue and economic output, Idaho’s agriculture industry is big and it’s getting bigger.

 “We’re not only big but we’re also growing,” University of Idaho Agricultural Economist Garth Taylor told lawmakers Jan. 6. “Idaho is a very small state economically but we have big agriculture.”

While total net farm income in Idaho declined 8 percent in 2021 compared with 2020 because farm production expenses reached a record level, total gross farm-gate revenue in the state increased 9 percent to a record $8.9 billion.

According to U of I’s annual Financial Condition of Idaho Agriculture report, farm-gate receipts for Idaho farmers and ranchers increased by almost $780 million in 2021.

A separate University of Idaho report released in January shows the state’s agriculture industry directly and indirectly accounts for 17 percent of Idaho’s total economic output, 12.5 percent of Idaho’s total gross domestic product and one of every eight jobs in the state.

According to Taylor, Idaho is the fifth largest agriculture state in the nation when it comes to gross domestic product generated by agriculture as a percentage of a state’s total GDP.

And the impact that agriculture has within Idaho’s economy continues to grow, significantly, he said.

Over the past two decades, Idaho agriculture is growing at a faster rate than the state economy as a whole and also the national farm economy as a whole, Taylor told lawmakers.

From 1997-2020, in inflation-adjusted dollars, Idaho GDP grew by more than 100 percent, while Idaho farm GDP grew by more than 200 percent, Taylor said.

Based on data from USDA’s Economic Research Service, total Idaho farm-gate receipts grew by 60 percent on a real-dollar basis from 1997-2020, Taylor said, while total U.S. farm-gate receipts grew by 10 percent during that same time.

Based on U.S. Department of Commerce and U.S. Bureau of Economic Analysis data, he said, while Idaho farm GDP grew 200 percent in real-dollar terms from 1997-2020, total GDP from U.S. farming grew 90 percent during that time.

It’s production agriculture and not food processing that is driving most of the growth in Idaho farm GDP, Taylor said.

For example, total GDP from Idaho’s food processing industry grew by 60 percent from 1997-2020.

“It’s your farmers – grandma and grandpa on a tractor – that are driving this growth,” Taylor said. “The major growth which we see in agriculture in Idaho has been in production agriculture, not in food processing.”

Taylor attributed the rapid growth in the state’s agricultural economy to a pro-agriculture climate in Idaho, especially compared with some neighboring states.

While the agricultural community can have wild revenue swings from quarter to quarter and year to year, the good news is that the industry has a stabilizing impact on local economies, Taylor said.

That’s because regardless of the price a potato farmer or dairyman gets for their commodity, the potatoes still need to be planted, fertilized and harvested and the cows still need to be milked and fed, he said.

“That volatility (within the ag industry) does not transmit into the local economies surrounding agriculture; they’re insulated from a great deal of that,” Taylor said. “All the purchases agriculture makes in the rural communities … are very stable.”