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The Financial Condition of Idaho Agriculture: 2004 projections John Hammel, Dean Ben Eborn, Extension Educator Garth Taylor, Extension Economist.

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Presentation on theme: "The Financial Condition of Idaho Agriculture: 2004 projections John Hammel, Dean Ben Eborn, Extension Educator Garth Taylor, Extension Economist."— Presentation transcript:

1 The Financial Condition of Idaho Agriculture: 2004 projections John Hammel, Dean Ben Eborn, Extension Educator Garth Taylor, Extension Economist

2 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

3 Idaho Cash Receipts, 2004  Record high $4.4 billion  Up 12% over 2003  Livestock & crop revenues up  Livestock up 19%  Crops up 4%

4 Idaho Cash Receipts from Farm Marketings ($ millions)

5 Idaho Cash Receipts from Farm Marketings, 2004

6 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

7 Livestock & Crop Cash Receipts

8 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

9  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

10  Wheat – up 25%  Production up 20%  Prices up 4%  U.S. production 8% below 2003  Other crops – down 1% Crop Cash Receipts – 2004

11  Onion revenues – up 3%  Production up 29%  Prices down 20%  Sugarbeet revenues– down 2%  Production down 13%  Prices weaker  Greenhouse & Nursery – down 1%

12 Idaho Farm Cash Receipts

13 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 21 st century

14 Idaho Farm Cash Receipts

15 Idaho’s changing agriculture: (10 years) Milk UP  16% to 30% Cattle UP  20% to 26% Spuds DOWN  21% to 11%

16 Government Payments – 2004  $148 million – down 3%  Production Contracts – $63 million  Price Support – $18 million  Conservation – $41 million  Disaster Assistance – $25 million

17 Idaho Government Payments, FY 2004 Total: $148 Million

18 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 Idaho Direct Government Payments

20 Idaho Net Farm Income, 2004  Revenues minus expenses  2004 Net farm income  $1.68 billion  Up 38% from 2003  Bigger checks & big expenses

21 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%)

22 Idaho Net Farm Income ($ millions)

23 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

24 Idaho Net Farm Income

25 Bottom Line Cash Receipts Record High Net Farm Income up 38% $1.68 billion $4.4 billion

26 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

27 Outlook for 2005 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 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

28 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

29 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

30 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)

31 31 Discussion


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