Low snowpack adds to Idaho farmers’ woes following dismal year
Jake Burtenshaw is taking 1,800 acres of barley out of production this year, knowing he’s not going to have enough water to grow it.
The Idaho Falls farmer is using what’s called “prevent-plant” because there isn’t enough water to reliably finish all his ground. By not planting about 1,800 acres that would normally be in barley, he can essentially shut off one block of ground so that all that limited canal water can be pushed onto the remaining acres.
“That’s another tool that farmers have in Idaho is prevent-plant, and so I set out about 1,800 acres so I can combine streams,” he told me in a phone interview.
The USDA prevent-plant program provides federal crop insurance coverage when extreme weather (such as drought) prevents farmers from planting insured crops by the final planting date and compensates producers for pre-planting costs, according to the USDA.
A poor water year is just the latest challenge for Idaho crop farmers, who are coming off one of the worst years for prices across the board in recent memory. Low commodity prices combined with high costs for fertilizer and fuel are straining farmers like they haven’t seen in decades.
Idaho’s mild, dry winter also means the possibility of such hardships as heavy weed and pest pressure, viruses, rampant crop diseases and now damage from late-season frost, according to University of Idaho experts.
But what about all the rain we’ve had this spring? The Treasure Valley had its wettest April on record.
“Spring rain does not replace winter snowpack,” University of Idaho ag economist Brett Wilder told me in a phone interview.
Winter snowpack in the mountains melts through the summer, trickling into the tributaries and rivers that fill up the reservoirs.
That allows farmers to irrigate off what’s called “river flow” or “natural flow” through July in good water years.
This year, though, Kuna farmer Richard Durrant expects the valley to be off river flow around May 10, at which point farmers will start tapping into storage.
In good years, water runs well into October. This year, Durrant said, he’s hopeful to have enough water to reach mid-September. The goal is to at least get sugar beets and later-season crops “made” by mid‑September, if water holds, he said.
Other water districts are in even more serious trouble: Certain areas, particularly around Twin Falls, may have as little as around 50 days of water, Durrant said.
The USDA Drought Monitor shows all of Idaho in a drought, with the Owyhee area at the worst category.
The Idaho Department of Water Resources on April 13 declared a drought emergency for the entire state, citing record-low snowpack and unusually warm winter weather.
Idaho farmers coming off a really bad year
Last year, crop prices were so bad, potatoes were left in the field, and Durrant told me it was the worst he’s ever seen.
Large volumes of potatoes, onions and sugar beets were diverted into feed markets instead of human food due to excess production and processing limits, he said.
Sugar beet prices are around $38-$40 per ton, down from about $70 per ton four years ago. He said illegal dumping of world sugar into the U.S. market is pushing prices down.
In addition, potatoes were down 12% last year and most other crops were down 5%-10%. Hay was the only thing that remained stable last year, Wilder said.
The general expectation is that harvest prices are going to be equal to or even lower than last year, unless something drastic happens somewhere else to push crop prices up, Wilder said.
“I would say commodity prices are about as low as anybody can stomach,” Durrant said.
War in Iran
On top of all that, the war in Iran has driven up fertilizer and fuel prices just as Idaho farmers prepare to plant for the season.
The cost of fertilizer is up 30%-100% this year, and that’s in addition to last year’s elevated levels, Wilder said.
Producers who pre-bought fertilizer last year are at a cost advantage, Wilder said, but it’s still not pretty. Durrant said he applied some fertilizer early, but he still has 30%–40% left to buy at higher prices.
Other costs, such as labor, interest payments and fuel, are also higher than normal.
Combining all those higher input costs with low commodity prices makes it nearly impossible to be profitable, Durrant said.
“Margins on the crop side are heavily squeezed,” Wilder said.
Not a 1980s-style crash
Wilder said farmers are shifting from yield to survival. Growers are cutting uncontracted acres, trimming inputs where they can and experimenting with water-saving crops like hemp, focusing on trying to eke out a profit rather than going for record yields.
He expects localized hardship, but not a 1980s-style crash, a severe economic collapse in American agriculture, the worst since the Great Depression, that saw widespread farm foreclosures, bankruptcies and plummeting land values, according to the American Farm Bureau. A combination of high interest rates, overproduction, reduced exports and a collapsed land bubble forced roughly 300,000 farmers into default.
Wilder said to expect pockets of real pain and some farm failures, especially in drought zones and among riskier borrowers, but there won’t be any broad industry collapse — but no broad recovery, either.
Durrant said he doesn’t know any farmers personally who have quit or gone out of business, but many are operating knowing they’ll likely lose money this year, hoping for better prices and that good management decisions pay off, along with some luck with the weather.
He’s concerned that if prices don’t improve by the end of the year, lenders may start calling loans, especially for highly leveraged operations.
‘Idaho has a sophisticated group of farmers’
“It’s certainly been a tough year for growers,” Logan Maag, a commercial lender with Zions Bank Ag Group, told me. “It’s on a downward trajectory right now compared to the higher crop prices that we saw in 2021 and 2022. There’s higher input costs across the board, which really compresses margins, as well, since we’re seeing lower crop prices.”
Maag said Idaho farmers can weather one or two bad years, but it could spell trouble when bad years start to stack up.
He said programs like prevent-plant can help offset losses, and the Farm Service Agency offers 90% loan guarantees and can refinance carry-over debt from last year’s disastrous season.
Similarly, the Small Business Administration offers a 90% loan guarantee for ag-related businesses affected by foreign competition or tariffs, he said. Plus, the SBA is rolling out a “grocery guarantee program” in early May, an initiative offering a 90% federal guarantee on loans up to $5 million to boost food supply chain businesses.
“I really feel like Idaho has a pretty sophisticated group of farmers, and they’ve been at it for a long time,” Maag said. “They know that if they’re going to be short on water, that they can crop-plan and use the different insurance programs to mitigate risk and make the proper decisions on what they’re going to grow this year and get through this.”
Scott McIntosh is the opinion editor of the Idaho Statesman. You can email him at smcintosh@idahostatesman.com or call him at 208-377-6202. Sign up for the free weekly email newsletter The Idaho Way.
