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Idaho is known for its 'Famous Potatoes,' but there's a new cash cow in the state

The dairy industry is Idaho's top agricultural money-maker.

BOISE, Idaho — Idaho agriculture is seeing an unprecedented boom, with the state currently ranking as the fifth-largest ag economy in the nation.

When it comes to potato-producing states, everyone knows Idaho is the cream of the crop. But there is a new cash cow in the Gem State.

Though the state leads the nation in potato production, and potatoes are the highest-selling crop, dairy products are actually Idaho's most valuable agricultural commodity.

"Idaho is normally number three or number four in terms of our [dairy] production," said Karianne Fallow, CEO of Dairy West, a group that represents and promotes the dairy industry in Idaho and Utah. "We jockey for that number three spot with New York but we're right behind California and Wisconsin."

A recent economic report presented to the state legislature breaks down how the industry is doing and shows some surprising trends.

According to the report, compiled by the University of Idaho, milk is the most valuable commodity produced in the state, worth more than $2.3 billion in 2019. Cattle came in second at $1.4 billion and potatoes were third at $1.1 billion.

"We have broken all-time records in Idaho agriculture," said Garth Taylor, a U of I agricultural economics professor who worked on the report. "We're over $8 billion in cash receipts in Idaho agriculture. That's the second-highest ever."

Of that $8.3 billion, 34% came from milk, 20% came from cattle, and 13% came from potatoes.

"The health of agriculture in the state of Idaho largely depends upon the health of the dairy industry," Taylor said. "It propels so much."

Credit: University of Idaho
Milk brought in the most money, in terms of cash receipts, in 2019.

Currently, Idaho has 600,000 dairy cows spread across 437 dairy farms statewide.

"We've had increasing milk production since 2013 by about 2% every year," Fallow said.

The U of I report shows milk production per cow has also doubled since 1980. Milk prices have also increased in recent years, with producers earning $17 per hundred pounds sold.

"That's up from a year ago about this time at about $13.80," Fallow said.

Though milk prices are volatile and often fluctuate, larger dairy operations and the increase in production have contributed to the bump in prices and the overall industry boom.

Kuna dairy owner Ted Vander Schaaf says the industry is improving.

"From the last couple years, things have improved by a couple of dollars which for us means we'll be able to make a profit or at least be able to cover our costs," he said. "And that's not been the case the last couple years."

A key component helping grow Idaho's dairy industry is an increase in international exports of agricultural products.

In 2018, Idaho ag products brought in $848 million, with dairy accounting for 18% of those exports. According to Dairy West, the key international markets are South Korea, Mexico, and China.

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But with all the boom in the industry comes some growing pains.

"We do not have enough milk plant capacity," Vander Schaaf said. "We cannot physically ship any more milk into our milk plants because there's no room. The local plants here in [the Treasure Valley] are all full, the plants in the Magic Valley are all full.

"Dairymen are actually being told to cut back," he added. "And that's the first time in my 20 years of producing milk that I've ever heard that."

Credit: University of Idaho
Idaho has the fifth-largest agricultural economy in the United States.

According to Dairy West, part of the reason for the shift in the industry is farmer innovation.

"They're investing in innovation to continually improve their operations, their animal care and their environmental stewardship," Fallow said. "And that's appealing so dairy food manufacturers want to do business with farmers in our region."

With inventions like the carousel milking system or robotic systems, modern technology has also increased the efficiency of local dairies in recent decades.

"We have actually a lot of software on dairies that we utilize," Vander Schaaf said. "I can look up on my phone to check on my cow records, I can check on the milking parlor, I can check on my employees and my phone and my apps."

The positive trend in the dairy industry is expected to continue through 2020, and that's encouraging for Idaho dairymen.

"It's really exciting," Vander Schaaf said. "I think Idaho is probably the best state in the nation to produce milk. With all of our land and water and the feed we're able to grow with the climate we have, I honestly believe it's the best place."

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University of Idaho Ag Report to Legislature 2020 - Free download as Powerpoint Presentation (.ppt / .pptx), PDF File (.pdf), Text File (.txt) or view presentation slides online. A report, put together by researchers at the University of Idaho and presented to the state legislature, breaks down how the industry is doing and shows some surprising trends.

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