Drought. International crop failures. Corn shifting from your table and livestock feed to gas in your cars tank.
Rising demand for American ag products from developing countries newfound affluence.
These are among a passel of conditions that have helped put Idaho agriculture on a roll, raising farm income over the past dozen years and contributing to a record $7.3 billion in cash receipts in 2011.
Its bigger than it ever has been, says Garth Taylor, professor of agricultural economics at the University of Idaho. Last year, there wasnt a crop we missed on, except onions.
This year might not be so rosy. I dont know if we can sustain that type of increase, he says. He forecasts a dogpile effect, with farmers rushing to plant the most profitable crops, resulting in overproduction and falling prices. That could take cash receipts down 30 percent.
But for now, agriculture is enjoying the good times.
Sugar beets perhaps the Treasure Valleys best-known crop, thanks to the prominence of the Amalgamated Sugar plant near I-84 in Nampa is on track to bring in receipts nearly $100 million over 2009 as the price of sugar increases around the world, Taylor says.
Even dairy Idaho agricultures biggest product, claiming more than a third of its cash receipts turned in a fair 2011, although some dairies sustained losses as a result of rising feed and fuel prices. If the dairy industry does well, total ag does well, Taylor says.
Dairies selling through co-ops such as Darigold tended to do better, says Rick Naerebout, who helps manage the Idaho Dairymens Association. But many dairies are merely treading water and still havent covered losses from previous bad years, he says.
The quiet player influencing both sides of growers ledgers rising cash receipts as well as expenses is corn.
Corn once found its way to your grocery store and into livestock feed. Now, 40 percent of the countrys corn crop goes toward ethanol for motor-vehicle fuel, says Paul Patterson, a University of Idaho ag economist.
Aggravated by a drought this year, the diminished U.S. corn supply for livestock and human consumption is pushing up prices at the supermarket and the feed store. Its also contributing to higher prices for crops such as hay, whose Idaho revenue shot up 76 percent in 2011.
Farmers nationwide are putting everything into corn because it is just so much more profitable, Taylor says.
Idahos hay crop dropped from 5.5 million tons in 2009 to 5 million tons in 2011 as total receipts hit a record $665 million. Less supply means more of a sellers market, driving up the price of hay.
But its not just corn thats playing a role in rising prices.
Worldwide demand for Idaho ag products is increasing. The states agricultural exports totaled $833 million in 2011, up 57 percent from 2007. And those estimates are low, state agricultural officials say, because they count only products exported directly from Idaho, not products sent out of state for export elsewhere.
Crop failures in Central Asian republics are bringing those countries to the U.S. for ag products, Patterson says. Ready-to-drink milk, once a nearly unheard-of export, is now on its way to China. Virtually all of Idahos wheat is exported. Large countries like China and India are looking to the U.S. to help feed their people, Taylor says. They just cannot grow all the commodities their countries are going to want.
Yet even those exports could face a challenge, Taylor says, as the countrys economy improves. We are looking at a stronger dollar, driving up the price of exports.
Canyon County reaps dollars in seed crops
Crookham Co. just off I-84 in western Caldwell looks like an idled industrial plant. Quiet. Few people walking around.
But in about two months, the company will be processing millions of pounds of one of Southwest Idahos biggest and tiniest crops: seed.
Canyon County is one of the worlds prime locations for cultivating seed. It produces seeds that are shipped to 120 countries and every continent but Antarctica.
Seeds for onions, beans, popping corn and vegetables are among those grown the region. Sixty-five percent of the worlds sweet-corn seed comes from Canyon County, said George Crookham, part owner of Crookham Co. Southwest Idaho is populated by some of the worlds largest seed companies, including Monsanto, Nunhems (part of Germanys Bayer Group) and Syngenta.
Seed is estimated at a $500 million yearly business in Idaho, with about $350 million of that in the Treasure Valley. Exact numbers arent known because seed companies dont release them, says Roger Batt, executive director of the Idaho Eastern Oregon Seed Association.
A combination of dry climate, good irrigation, lots of sunshine and harsh winters that kill insects have combined to make Canyon County a desirable place to raise seed with low disease and high germination rates.
Sid Freeman, a Caldwell grower, puts many of his 450 acres into seed each year.
Among his 2012 crops are 18 acres of cranberry bean seed.. The seed will produce beans that will likely end up in soups, Freeman says.
The demand is pretty high, he says.
He estimates he will gross nearly $17,000 off the bean acreage before expenses. Selling the beans for human consumption, you get less money for them, he says.
Batt says hes heard of growers making $4,000 to $10,000 net profit per acre by growing some types of seed.
Crookham Co. is a local, family-owned seed company more than 100 years old. Crookhams seeds go to food companies such as Del Monte, which turns the seed over to farmers to grow corn that goes into Del Monte products, and to Burpee, one of the countrys largest seed-selling companies.
Crookham declines to disclose sales but says the company has seen growth in the business every year for the past decade.
The garden business went up after this most recent Great Recession, because (people said) Why not plant a garden? I dont have a job, he says.
Forty percent of the companys seed goes overseas, where demand is increasing.
Youve got a lot of places like China, they are wanting more pork, they are wanting more chicken. India is the same, he says.
That means more feed for animals, more grain and more demand for seed.
Dairies squeezed by rising feed costs
Idaho dairies economic model is simple and has served the sector for years. Dairies buy their livestock feed from somebody else and concentrate on milk production.
Now that model is bruised, if not broken. The bruising is affecting dairy farmers in the Treasure Valley, where 20 percent of Idahos milk is produced.
We have seen unprecedented increases in input costs in the last couple of years, says Joe Dalton, a dairy specialist in the University of Idaho extension office in Caldwell.
Producers are selling milk for about $15.50 per hundred pounds, but production cost are running as high as $18.50.
A principal culprit: corn. As the countrys corn crop moved more toward ethanol production for gasoline, demand for corn as feed has sent prices skyrocketing, and farmers reallocation of acreage to corn has reduced supplies of other feeds, such as alfalfa. Some local dairies have seen the price of alfalfa nearly double in a few years.
Some of the (dairies) are over their head to the bank, and the bank is not allowing them to purchase but a few weeks of feed in advance, says Garth Taylor, professor of agricultural economics at the University of Idaho. That means those dairies cant take advantage of lower contract prices for feed.
But at Beranna Dairy outside Caldwell, Bernie Teunissen and his wife, Anna, have insulated themselves against rising feed prices. They are growing their own.
Teunissen started his dairy in 2000 after moving from Southern California, where he felt he was being choked by encroaching civilization. He has up to 1,900 acres in alfalfa and other feeds for his 3,700-cow dairy. That allows about 40 percent of the Teunissens feed to come from their own land.
Teunissen grows alfalfa at a cost of $110 a ton. If he were to buy it on the open market, it would cost about $200 a ton.
Growing his own cow feed is one reason Teunissen says his operation remained profitable in 2010 and 2011, when some dairies were losing money. We see that as the future of our industry, he says.
For some dairy producers dependent on others feed, the future isnt bright. Feed prices have soared this year.
Dairy is getting really squeezed, says Taylor, the University of Idaho agricultural economist. They are barely covering operating costs. They are not covering the fixed costs.
A bright spot is Chobani, the Greek yogurt producer building a plant in Twin Falls.
Its huge, says Bob Naerebout, executive director of the Idaho Dairymens Association. While Chobani will likely get most of its milk from the Magic Valley, the increased demand for dairy products will have ripple effects in the Treasure Valley, he says. Although Chobanis plant has yet to open, some large Idaho processing operations that use milk have already raised their purchase prices to ensure they will have a steady supply, Naerebout says.
Sweet-smelling mint produces sweet profits
Bob McKellip stands in the middle of a field whose crop is impossible to misidentify. A crisp, clear aroma wafting up from the leaves of foot-high plants gives it away: mint.
McKellip, whose farm is on CanAda Road north of the Idaho Center in Nampa, has grown mint most the 35 years hes had his own farm.
Idaho plants about 18,000 acres of mint 17,000 in peppermint and 1,000 in spearmint. Mint growers extract mint oil from leaves through a cooking and condensing process and seal it in drums. McKellip has a distillery to extract his own oil. He also does distilling work for four other mint growers. The distilleries are expensive, costing up to $500,000. But an acre of mint can yield 100 pounds of oil.
A farmer can have the whole crop in the back of a couple of pickup trucks, says McKellip, who grows mostly peppermint.
About 90 percent of Idahos peppermint crop goes into products such as Colgate toothpaste and Wrigley gum. Ten percent goes into products such as cream flavorings and Icee Hot, used to treat sore muscles. A mere drop of peppermint oil flavors about seven packs of chewing gum.
The oil sells for $18-$25 per pound. Idaho sales totaled $39 million in 2011, third highest in the country after Oregon and Washington.
A few years ago, mint was a much bigger business. The state had 27,000 acres under production. But the market was oversupplied and being challenged by cheaper imported mint oil, McKellip said. Prices fell to $8 a pound, and the country found itself with nearly a million pounds of mint oil carried over from previous years. The price got so low, people quit planting it, he says.
McKellip cut back to fewer than 75 aces. The number of mint growers in Idaho shrunk from 211 in 1997 to 70 in 2011.
Eventually the oversupply was absorbed, and mint prices improved. McKellip now puts 350 of his 1,400 acres of farmland into mint production, Today a grower can expect to make $1,000 to $2,000 in profit per acre on mint, says Roger Batt, executive director of the Idaho Mint Commission.
I think in general mint people in agriculture are doing all right, McKellip says.
Onion growers look for better year in 2012
Ron Mio had 125 acres of onions just peeking through the soil on his Fruitland farm last May when a hailstorm hurled pea-sized bits of ice over 90 acres, wiping out the shoots.
With the bean crop he planted to replace it, along with the 35 acres in onion that survived, Mio thinks hell recoup his costs.
But his bout with the weather is just one more bit of tough luck that has befallen the onion fields in Southwest Idaho and Eastern Oregon that provide much of the country with onions during the winter.
Onions stand out as the one sector of Idaho agriculture that hasnt been doing well lately. Sagging prices cut cash receipts by an estimated $30 million in 2011.
Mio felt the price problems keenly. He has adopted a careful onion-planting philosophy: We raise what we can afford to lose, he says.
Southwest Idaho and Eastern Oregon ship more than a billion pounds of onions each season. About 20,000 acres are planted each year in Idaho and Eastern Oregon, tended by about 300 growers. They grow varieties of onions developed specifically to hold well in storage and feed winter demand.
But last year, they shipped into a marketplace still soft following the recession, especially in restaurants, says Sherise Jones, marketing director for the Idaho-Eastern Oregon Onion Committee. We struggle somewhat to keep onion consumption up and are still seeing a little bit of a dip in food service, she says.
Onion growers, recognizing the switch by many consumers to cooking at home, are aiming much of their marketing to people who would rather create meals in their own kitchens than pay to dine out.
Idaho and Oregon onion growers are rebranding themselves as USA Onions and launching a promotion campaign with the makers of Weber grills to promote grilling onions grown in this region during football season. The promotion includes sweepstakes for a chance to win grills.
Growers are anticipating a better year in 2012 as the economy improves. More and more gourmet burger joints are coming out, Jones says places like Smashburger and Five Guys. These places are getting more savvy that people are staying home, and are trying to get them out there.