USDA report gives U of I ag economist reason for optimism 

Despite projections of record income for U.S. food producers, University of Idaho (U of I) Agricultural Economist Garth Taylor cautions 2022 won’t necessarily be a banner year for agriculture.

In its “2022 Farm Sector Income Forecast” released on Sept. 2, the USDA’s Economic Research Service (ERS) predicted producers’ cash receipts will increase 21% to more than $525 billion.

The USDA anticipates that the value of crops produced in the U.S. will rise by 9% in 2022, and cash receipts from animal production will be up by a whopping 28%.

However, Taylor explained that those numbers must all be viewed through the lens of the year’s major theme – inflation. Costs of producing crops are expected to rise by $66.2 billion in dollars unadjusted for inflation, which would be the largest one-year increase on record.

“The top line, the cash receipts, it looks like we’ll do very well this year, but those are not inflation adjusted, and it eats it up really fast,” Taylor said. “The big story is we’re doing really well on the gross, but on the net they’re projecting fertilizer will be up 52 percent, fuel will be up 42 percent and your interest payments will be up 40 percent. That’s pure, 100 percent inflation. The gouge that is taken out of the farmer’s bottom line is inflation.”

According to the report, net farm income – a calculation of revenue after all expenses have been paid – will be up by 5.2% to $147.7 billion nationally. However, when accounting for the decreased spending power of the dollar, net farm income is projected to decrease by 0.6% from the prior year.

Food producers will also be affected by a nearly 50% decrease in direct government payments. The USDA estimates government payments will be down by $12.8 billion, mostly due to the loss of programs to offset the negative effects of COVID-19 and trade disruptions.

The report was bullish on the dairy sector, predicting the average U.S. dairy will increase its income by more than 60% this year compared with 2021. More than a third of Idaho’s agricultural cash receipts come from dairy. Beef cattle represent 20% of the farm economy in Idaho.

“It’s a livestock-driven state,” Taylor said. “More than 75 percent of Idaho agriculture is receipts from livestock or feed that goes to livestock.”

Rick Naerebout, CEO of the Idaho Dairymen’s Association, acknowledges that Idaho dairy producers were “sitting plum” earlier in the year, but he’s been concerned by more recent declines in the price of cheese. Nearly 65% of the milk produced in Idaho is used for making cheese, and it takes about 10 pounds of milk to make a single pound of cheese. The cost to dairy farmers of producing a hundredweight of milk is about $20, and the current price of cheese is in the vicinity of $1.85 per pound, which is well below the production cost.

“One of the big things that worries our dairymen is, ‘Man, I’m taking a ton of risk for the same or less margin than I normally do for this.’ We’ve never seen a cost structure this high,” Naerebout said. “We could rebound and have a really good fourth quarter, but it’s a little bit hard to be bullish right now.” 

Also on Sept. 2, the USDA issued its final report on agricultural profits for 2021, confirming that Idaho’s net farm income for the year, unadjusted for inflation, declined by about 30%. The drop in profits is nearly quadruple the decline that Taylor and other U of I economists predicted for 2021 last December.

“The huge increases in fertilizer, fuel, interest and feed that the USDA is forecasting endanger the bottom line,” Taylor said.

—University of Idaho press release

Snake River Sugarbeet Growers Association names new executive director

Samantha Parrott brings over a decade of fundraising and relationship-building experience to the new role. Growing up in Rigby, Parrott found her love of agriculture by being involved in FFA and by hearing stories about her grandparent’s farm in Eastern Idaho. She received her Bachelor of Science in agribusiness and Master of Science in adult, organizational learning and leadership degrees from the U of I. While an undergraduate at U of I, Parrott served as the 2011-12 Associated Students University of Idaho student body president.

“I’m very passionate about the agricultural industry, and I can’t wait to work directly with growers to tell their story and advocate on their behalf,” she said. “Working with the Snake River Sugarbeet Growers Association board is truly the opportunity of a lifetime.”

In January 2022, the Snake River Sugarbeet Growers Association, formerly known as the Idaho Sugarbeet Growers Association, expanded to include growers in Oregon and Washington. The association now represents 700 producers and 180,000 acres across the three states.

“The Snake River Sugarbeets Growers Association is very excited to have Samantha Parrott join us in promoting the sugarbeet industry as well as agriculture in general,” said Randall Grant, Snake River Sugarbeet Growers Association board president. 

Priorities for the association include promoting state and federal policies that benefit the agricultural industry, including U.S. Sugar Policy and educating people about the importance of agriculture.

The Snake River Sugarbeet Growers Association is based in Boise, Idaho. Parrott resides in Nampa with her husband and three children.

—Excerpts from Snake River Sugarbeet Growers Association press release

Idaho and Taiwan sign two-year wheat trade agreement 

Gov. Brad Little has signed a two-year agreement supporting Idaho wheat sales to Taiwan in a deal that officials say gives wheat producers a reliable buyer and Taiwan a dependable supplier.

The Republican governor participated in the ceremonial signing with officials from Taiwan, the Idaho wheat industry and Taiwan Flour Mills Association.

Wheat is one of Idaho’s top crops and about half is exported to other countries. Taiwan is one of the state’s top buyers, with trade dating back to the 1970s. Officials said the agreement solidifies that commitment.

“They have been a very, very loyal customer, Taiwan has, for a long time,” Little said at the signing in the governor’s ceremonial office at the Statehouse, noting Taiwan is the second-largest market for everything exported out of Idaho. “Our farmers in Idaho, a lot of them have made significant investments in their farms predicated on that consistent good market that we have.”

“The Wheat Commission and the farmers in Idaho are committed to maintaining this relationship,” said Idaho Wheat Commission Chairman Clark Hamilton. Besides wheat, Idaho is also connected to Taiwan through Boise-based memory chipmaker Micron Technology, one of Taiwan’s largest foreign employers.

“We have a very fruitful relationship with them,” Little said at the signing. “Our countries are bound by a common thread of economic freedom [and] entrepreneurial growth.”

—Excerpted from Keith Ridler, The Associated Press