Those numbers translate into $2.2 billion, or 3.4 percent, of the state’s gross domestic product and represent about one-third of the state’s agricultural sector and a significant portion of the total state economy, the economists reported.

“The dairy industry has become the economic engine for rural Idaho, particularly south-central Idaho,” said Bob Naerebout, executive director of Idaho Dairymen’s Association.

Idaho’s milk production has seen significant growth in the past three decades, with milk sales becoming the leader in farmgate receipts, he said.

Researchers say everyone understood the positive financial influence that the dairy industry has in rural Idaho. But what the study clearly shows is that Idaho’s dairy industry is responsible for generating a significant portion of the state’s total jobs, wages and GDP, said Phil Watson, associate professor of ag economics at the University and an author of the study.

“We’re finding a substantial amount of economic activity can be traced directly and indirectly to the dairy industry. It’s a substantial, growing segment of Idaho’s economy,” he said.

Idaho is now the nation’s third-largest state for milk production, and the state’s dairy industry continues to grow and mature. The processing sector is growing, but it’s not as mature as the producer sector and not as developed as other big dairy states, he said.

Wisconsin produces twice as much milk as Idaho but has six times the value of processed product, he said.

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