The Financial Condition
of Idaho Agriculture:
2004 projections
John Hammel, Dean
Ben Eborn, Extension Educator
Garth Taylor, Extension Economist
Idaho Agricultural Outlook
 Estimate of 2004 Revenue



Estimate by UI Ag Economists
Based on Calendar Year
estimates of prices & revenues
Estimated government
payments & income
 Outlook for 2005
Idaho Cash Receipts, 2004

Record high $4.4 billion


Up 12% over 2003
Livestock & crop revenues up


Livestock up 19%
Crops up 4%
Idaho Cash Receipts
from Farm Marketings ($ millions)
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004 ('03-'04)
LIVESTOCK
Cattle and Calves
Milk
Other Livestock
TOTAL LIVESTOCK
636
508
97
1,241
574
653
107
1,333
663
634
109
1,405
653
829
104
1,585
677
834
105
1,616
757
762
110
1,629
916
1,043
103
2,063
976
918
105
1,999
1,062
1,005
110
2,177
1,155
1,335
108
2,598
9%
33%
-2%
19%
CROPS
Barley
Beans
Greenhouse/Nursery
Hay
Onions
Potatoes
Sugarbeets
Wheat
Other Crops
TOTAL CROPS
145
39
43
188
42
677
191
399
192
1,916
157
52
48
199
51
694
210
430
190
2,031
142
41
63
243
44
521
212
439
186
1,891
120
40
61
248
44
546
219
268
181
1,727
129
34
67
215
37
597
216
229
174
1,698
120
33
69
263
44
539
212
298
222
1,799
139
28
66
311
40
582
188
254
155
1,762
139
33
70
293
52
702
212
329
157
1,986
148
32
70
244
69
560
212
280
160
1,776
183
37
69
260
71
505
209
350
158
1,843
24%
14%
-1%
7%
3%
-10%
-2%
25%
-1%
4%
TOTAL CASH RECEIPTS
3,157
3,364
3,296
3,313
3,314
3,395
3,825
3,985
3,953
4,441
12%
Year-to-Year Change
8%
7%
-2%
1%
0%
2%
13%
4%
-1%
12%
Idaho Cash Receipts
from Farm Marketings, 2004
Other Crops
4%
Wheat
8%
Cattle
26%
Sugarbeets
5%
Potatoes
11%
Onions
2%
Hay
6%
Greenhouse
2%
Beans
1%
Barley
Other Lvstk
4%
2%
Milk
29%
Livestock Cash Receipts – 2004

Cattle & Calves – up 9%




Marketing steady
Prices up 18%
Supply down, improved beef demand
Milk – up 33%



Idaho’s largest revenue producer
Production up nearly 3%
Prices hit all time high in May
Livestock & Crop Cash Receipts
3,000
2,500
$ millions
2,000
1,500
1,000
500
Livestock Receipts
Crop Receipts
0
70 972 974 976 978 980 982 984 986 988 990 992 994 996 998 000 002 004
9
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
2
2
Crop Cash Receipts – 2004

Barley – up 24%

Production up 26%, prices
down 2%
 Record high yields

Dry Beans – up 14%

Production up 9%, prices up 4%
 Yields & acres harvested up
Crop Cash Receipts – 2004

Potatoes – down 10%





Idaho’s largest crop revenue
Production up 7%, prices down 3%
Statewide record yields
Two bad years in a row – down 20% in 2003
Hay – up 7%


Alfalfa production down 4%
Prices up 10%
Crop Cash Receipts – 2004

Wheat – up 25%

Production up 20%
 Prices up 4%
 U.S. production 8% below 2003

Other crops – down 1%
Crop Cash Receipts – 2004

Onion revenues – up 3%



Production up 29%
Prices down 20%
Sugarbeet revenues– down 2%

Production down 13%
 Prices weaker

Greenhouse & Nursery – down 1%
re
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Idaho Farm Cash Receipts
1,400
1,200
2003 receipts
2004 projected receipts
800
600
400
200
-
Idaho Cash Receipts...
The Last 35 Years

Nominal $



2004 Record high
2004 – 12% increase
Real $ (inflation adjusted, 1996)



2004 – 23% above 35-year average
35-year low in 1971…three years
later… high in 1974
Stability – the 90’s and 21st century
Idaho Farm Cash Receipts
5,000
4,500
4,000
3,000
2,500
2,000
1,500
1,000
Nominal receipts
500
Real receipts
20
03
20
00
19
97
19
94
19
91
19
88
19
85
19
82
19
79
19
76
19
73
0
19
70
$ millions
3,500
Idaho’s changing agriculture:
(10 years)
Cash Receipts
(% of total cash receipts)
0.3
0.25
Percent
Milk UP
 16% to 30%
Cattle UP
 20% to 26%
Spuds DOWN
 21% to 11%
0.35
0.2
0.15
0.1
0.05
0
1995
1996
1997
Cattle & Calves
1998
Milk
1999
Potatoes
2000
Grains
2001
Hay
2002
2003
Sugarbeets
2004
Government Payments – 2004

$148 million – down 3%
Production Contracts – $63 million
 Price Support – $18 million
 Conservation – $41 million
 Disaster Assistance – $25 million

Idaho Government Payments, FY 2004
Total: $148 Million
Conservation
28%
Price Support
12%
Emergency
17%
Production
43%
Government Payments
Idaho vs U.S.

Idaho payments
2003 – 13% of net farm income
 2004 – 9% of net farm income
 1% of U.S. total farm payments


U.S. payments
2003 – 27% of net farm income
 2004 – 21% of net farm income

19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
$ millions
Idaho Direct Government Payments
300
250
200
150
100
50
0
Idaho Net Farm Income, 2004

Revenues minus expenses
 2004 Net farm income

$1.68 billion
 Up 38% from 2003

Bigger checks & big expenses
Idaho Farm Income – 2004
Revenue

Strong livestock
receipts (+19%)
 Strong crop
receipts (+4%)
 Government
payments lower
Expenses

Farm origin
inputs (+7%)
 Manufactured
inputs (+8%)
 Other inputs
(+10%)
Idaho Net Farm Income ($ millions)
1995
REVENUES
Crop Production
Livestock Production
Services & Forestry
Government Payments
TOTAL REVENUES
1996
1997
1998
1999
2000
2001
2002
2003
2004 ('03-'04)
2,000 2,191 1,890 1,777 1,778 1,896 1,676 2,133 1,848 2,126
1,253 1,327 1,483 1,616 1,658 1,640 2,091 2,011 2,190 2,602
239
247
253
314
316
296
318
410
402
426
89
116
110
199
211
261
208
163
152
148
3,582 3,880 3,737 3,906 3,962 4,093 4,292 4,717 4,592 5,302
15%
19%
6%
-3%
15%
EXPENSES
Farm Origin Inputs
577
596
670
615
609
642
710
973
890
952
Manufactured Inputs
523
593
578
562
555
572
571
603
594
641
Other Inputs
655
654
713
722
704
752
720
755
728
797
Vehicle Regist./Licensing
9
10
11
12
10
13
12
10
10
10
Property Taxes
83
88
90
89
87
89
86
90
86
87
Capital Consumption
267
274
277
283
287
291
297
303
302
312
Payments to Stakeholders
680
677
708
698
720
777
748
787
765 823
TOTAL EXPENSES
2,795 2,893 3,048 2,981 2,972 3,137 3,143 3,521 3,374 3,623
7%
8%
10%
1%
1%
3%
7%
7%
NET FARM INCOME
787
987
689
924
990
38%
Year-to-Year Change
10%
25%
-30%
34%
7%
957 1,148 1,196 1,218 1,679
-3%
20%
4%
2%
38%
Idaho Net Farm Income...
The Last 35 Years

Net farm income – $1.68 billion



Up 38%
59% above 10-year average
Real income … second highest


78% above 35-year average
Income volatility
 35-year high in 1974…low in 1979
 90’s – 2000s much more stable
Idaho Net Farm Income
1,800
1,600
1,400
1,000
800
600
400
Nominal dollars
200
Real dollars
20
03
20
00
19
97
19
94
19
91
19
88
19
85
19
82
19
79
19
76
19
73
0
19
70
$ millions
1,200
Bottom Line
Cash Receipts Record High
$4.4 billion
Net Farm Income up 38%
$1.68 billion
Outlook for 2005
Beef
• Strong demand
• Prices
•2003 avg monthly price $72
•2004 avg monthly price $78
•2005 choice 1300# $85 to $91
Milk
• Idaho production
• 2003 avg monthly milk production 731
• 2004 avg monthly milk production 755
• Prices
• 2003 avg monthly milk price $11.53
• 2004 avg monthly milk price $14.78
• 2005 Class III $11.60 to $13.10
Outlook for 2005
Wheat
• Prices
• 2005 prices close to 2004
• Stocks and exports
• World stocks second lowest since
1989, but increasing
• US ending stocks up and demand
down on weak exports, in spite of
weak dollar
• Use up 3%, but outpaced by
production increase of 11%
• Lower Idaho yields, lower revenues
Barley
• Production
• Contracted acres increase as Modelo plant
starts in early 2005 and AB expansion
• High yields of 2004 unlikely
• Prices
• Weak open malt barley prices, but up from
2004
• 2005 Contract prices stable, $5.50 - $7
• Feed barley price will remain weak,
depressed by huge corn crop, $4 - 4.25
Outlook for 2005
Potatoes
Production: down
• Yield decline from 2004 record yield
• Acres down after weak 2004 price
• Impact of Idaho Fresh PGI
Prices: up
• Prices should improve if supply drops to better
match demand
• Contract prices expected to increase
• Impact of Idaho Fresh PGI
Watch Out for 2005
Global economic conditions
 Disaster relief – increase demand for some
commodities: beans, lentils, wheat
 Weak dollar should help exports (63¢ to 83¢
Canada 12/31/02 to 12/31/04)
 Value of Ag imports out weighs exports
US consumer demand
 Protein diet changes drove for milk, cheese
and meat in 2004 will likely decline
 French fry consumption will see some
recovery from the Atkins Diet slump of 2004
Watch Out for 2005
Production cost
 Interest rates will continue to increase
 Fertilizer cost will increase by 5% to 30 %,
biggest change on potassium
 Fuel costs will remain high
 Labor costs continue to increase above rate
of inflation and availability is a problem
Water availability
 Drought
 Long term water availability to Idaho Ag
(CREP program)
Discussion
31