It’s easy for ag producers to get discouraged. Prices seem chronically down; weather is fickle and everyone else seems bent on taking a portion of your hard-won profit. Land prices skyrocket and many producers find themselves land rich and money poor ... millionaires on paper that struggle to pay for their kid’s braces. Why not sell out and live fat and sassy? Idahoans are blessed that most land stays in ag production.
The reality is, 1 in 8 Idaho jobs are created by our agriculture industry. Ag products are more than what we eat. They represent new dollars to drive the economy. Like mining and forestry, production agriculture is a compounding economic force that leads to support industries that live on the base products farmers and ranchers create. Agriculture isn’t just responsible for what we eat. Insurance companies and their agents profit from insuring everything from crop to combine. Suppliers of support products like machinery, fertilizer, seed, twine, bolts and tools all make their income from sharing in the farmers’ success. Even the convenience store clerk and the clothing salesman owe thanks to a portion of their salary coming through purchases made by patrons who, in turn, can trace their funds back to the production and sale of agricultural goods. That’s the compounding power of raw production.
We often think of farming in terms of fields planted in grain, alfalfa or corn. That, however, doesn’t clearly represent Idaho’s agriculture. Of the 2018 cash receipts, three-fourths represent a tie to the livestock industry. A full 33% of Idaho’s agriculture cash receipts are from milk sales. Beef cows and calves represent another 23%. Crops like wheat, beans and potatoes largely find their way to the table. Others like hay, barley, corn and many other crops are destined for the supply chain that supports Idaho’s livestock industry. Idaho is famous for its potatoes, but they only represent 12% of Idaho ag sales. The reality is we are much more driven by milk and meat production than potatoes.
One of the interesting quandaries of agriculture is that the modern farmer is too good at what he does. He is constantly improving and, consequently, producing more product with the same number of acres or livestock. From 1980 – 2016 Idaho’s milk per cow has increased 65%, while the real price of that milk has gone down 59%. Over that same time period, potato farmers have made improvements to get 48% more potatoes per acre ... and been rewarded with a 45% decrease in the real price for their product. Wheat prices are dragging bottom because there is excess wheat in storage. From a net revenue perspective, the technology allowing for increased production has been roughly balanced by a drop in price per unit. To farming’s lifeblood that can be discouraging. To society it means much more.
The translation is two-fold. First, the poor to average farmers have likely gone out of business. Those still operating are probably ones that have adopted new technology and increased their production, and likely decrease their cost of production. Second, those of us that depend on agriculture for our daily bread (and probably our income) are in good hands. The farmer and rancher have proven, once again, effective beyond the market forces. We are going to lose some farm acres to development, but agriculture is ahead of the curve.