Oregon farm net income hit $861 million last year, failing to keep pace with the soaring cost of agricultural operations.
A new U.S. Department of Agriculture Economic Research Service report shows only a marginal increase from 2007, and mirrors a 12% decline in net income from the average of the last five years.
Net farm income for Oregon hit a peak in 2003 at $1.14 billion, but has been declining since, reports the Oregon Department of Agriculture.
"Just as everything seems to cost substantially more to the rest of us, Oregon agricultural producers are having to pay much more for all of the things that go into running an operation," says Katy Coba, ODA director.
"The positive news is our farmers and ranchers enjoyed strong prices for the most part and were able to maintain good production. That softened the blow of higher expenses in 2008."
Coba says she is concerned that when 2009 net farm income numbers come out next year, "we'll realize how challenging the current conditions truly are."
What is evident, says ODA analyst Brent Searle, is that "the cost of doing business for farmers and ranchers is now outpacing the sales generated, which translates into a flat bottom line from last year and a decrease over the five year average."
"Overall, the value of production was up 5% from the previous year," he notes, "but what operators have to pay to produce their crops and livestock was up 7% last year, and 26% over the five-year average."
The value of Oregon crop production last year reached $3.2 billion, up 7.7%, while the value of Oregon livestock production was $1.02 billion, a 1.2% decline, the report states.
Grain crops did particularly well because of high commodity prices and record export levels. Livestock sales were actually up because of herd liquidation due to higher feed costs and other input expense leaps.
Oregon oil crops did "extremely well," say ODA officials, doubling in value to more than $2 million as interest in renewable fuels continues.
Nearly all expense categories posted increases in 2008, with significant jumps over the five-year average. Fertilizer costs were up 30%; pesticides, 17%.
But labor continues to be the biggest cost input for many in agriculture, registering an overall cost of $1 billion-plus for the first time in 2008. That comes to about 40% of total input costs paid by growers, says Searle.