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POTATOES, HAY HOT COMMODITIES; MILK AND BEEF MAINSTAYS OF IDAHO AG'S 2006 CASH RECEIPTS

MOSCOW - Idaho's beef and dairy operations again provided the biggest share of nearly $4.5 billion in cash receipts collected by the state's agricultural industry in 2006, according to projections by University of Idaho agricultural economists.

The total receipts topped 2005 performance for another record, but a modest one. The gain was $5 million, a tenth of a percent, the economists projected.

Potatoes produced the brightest spot for Idaho farmers. The state's most famous agricultural product accounted for $664 million in sales, a 27 percent gain from 2005. Hay sales grew to nurture Idaho's growing dairy herd, yielding $373 million or a 12 percent increase from 2005.

High costs for fuel, fertilizer and even feed outstripped the modest gain in gross receipts. Idaho's net farm income slid 23 percent from the previous year from $1.125 billion to $868 million. The decline followed a 36 percent drop in net farm income last year, both hangovers from an astronomical 101 percent gain in 2004.

The two straight declines dropped net farm income to 8 percent below the 37-year average adjusted for inflation.

"The bottom line is that cash receipts are virtually equal to last year, but net farm income fell 23 percent," said Garth Taylor, UI Agricultural Economics and Rural Sociology Department regional economist at Moscow.

Farmers can and do compensate for fuel and fertilizer prices by shifting crops they grow or in how they grow them. No-till farming, which uses less fuel and fertilizer, is gaining ground, he said.

John Hammel, University of Idaho College of Agricultural and Life Sciences dean, will review the Idaho Agriculture's 2006 performance for the Idaho Legislature's Joint Finance and Appropriations Committee Jan. 4.

"Idaho agriculture is bigger now than it has ever been. It's in transition as far as the commodities the state is producing, and we're working hard to reallocate our college resources to meet the needs as we go forward," Hammel said.

Not all crops fared as well as potatoes and hay. Sales of wheat, the state's next most lucrative crop, sagged by 3 percent to $325 million from 2005, largely the result of a nearly 10 percent drop in yield due mostly to weather conditions. Drought in Australia cut world wheat supplies, producing the best prices in a decade and offsetting the lost Idaho production.

Better market prices coupled with a 20 percent increase in sugarbeet production, led to a 22 percent surge in cash receipts to $218 million, the best performance since 1998. Worldwide interest in converting crops to ethanol for fuel tightened sugar supplies and sweetened sugarbeet sales.

Receipts from milk, cattle and calves, and other livestock accounted for more than $2.4 billion, some 55 percent, of Idaho agriculture's cash sales.

Milk sales from the state's growing dairy herd, which approached 473,000 producing cows, yielded nearly $1.3 billion, a 9 percent drop from 2005. Idaho now ranks as the nation's No. 4 milk producer, behind only California, Wisconsin and New York.

Beef cattle sales also dipped 3 percent to just over $1 billion.

"The Financial Condition of Idaho Agriculture: 2006 projections" was prepared by Ben Eborn, UI extension educator in Teton County, Paul Patterson, Extension agricultural economist at the Idaho Falls Research and Extension Center, and Taylor, Agricultural Economics and Rural Sociology Department regional economist at Moscow.

The report can be found online at www.ag.uidaho.edu/aers/resources.htm.

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