2018 Wisconsin Agriculture Outlook Forum 2018 Wisconsin Agricultural
- Slides: 26
2018 Wisconsin Agriculture Outlook Forum 2018 Wisconsin Agricultural Outlook Forum • 10: 00 -12: 30: Agricultural Situation and Outlook • Farm Income and Cost, Dairy, Grains and Livestock, Specialty Crops and Wisconsin Economy • 12: 30 -1: 30: Lunch • 1: 30 -4: 00 Navigating the Rural-Urban Divide • Kathy Cramer: The Politics of Resentment • Wisconsin Agribusiness and the Rural-Urban Divide • https: //renk. aae. wisc. edu/ag-outlook-forum/ • Livestream: https: //www. youtube. com/user/uwipm • #Wi. Ag. Outlook
2018 Wisconsin Agriculture Outlook Forum Thank You to Our Sponsors
2018 Wisconsin Agriculture Outlook Forum 2017 FARM INCOME AND 2018 COST OUTLOOK Paul D. Mitchell Professor, Agricultural and Applied Economics Extension Specialist, Cropping Systems Management Director, Renk Agribusiness Institute Co-Director, Nutrient & Pest Management Program Wisconsin Agricultural Outlook Forum January 25, 2018 Madison WI 608 -265 -6514, pdmitchell@wisc. edu, @mitchelluw
2018 Wisconsin Agriculture Outlook Forum 2017 Farm Income & 2018 Cost Outlook 1. US farm income is up slightly in 2017, in Wisconsin too 2. Projected 2018 costs imply negative margins for crops and dairy for many farmers 3. Farmers are financially stressed
2018 Wisconsin Agriculture Outlook Forum $96. 9 B +4% $63. 2 B +3% https: //www. ers. usda. gov/topics/farm-economy/farm-sector-income-finances/highlights-from-the-farm-income-forecast/
2018 Wisconsin Agriculture Outlook Forum https: //www. ers. usda. gov/topics/farm-economy/farm-sector-income-finances/farm-sector-income-forecast/
2018 Wisconsin Agriculture Outlook Forum https: //www. ers. usda. gov/topics/farm-economy/farm-sector-income-finances/farm-sector-income-forecast/
2018 Wisconsin Agriculture Outlook Forum Government Payments • Price/Revenue based payments ARC & PLC • US: Decreased 17% (-$1. 4 billion) • WI: Decreased 71% (from $202 to $59 million)
2018 Wisconsin Agriculture Outlook Forum Wisconsin Dairy Cash Receipts 2010 -2017 F 8, 000 Cash Receipts ($ million) 7, 000 6, 000 +$454 M +9% 5, 000 4, 000 3, 000 2, 000 Monthly production up 1. 4% on average Monthly mailbox price up 13% on average 1, 000 0 2011 2012 2013 2014 2015 2016 2017 2018
2018 Wisconsin Agriculture Outlook Forum Wisconsin Beef Cash Receipts 2010 -2017 F Cash Receipts ($ million) 2, 500 2, 000 +$56 M +3% 1, 500 1, 000 500 0 2011 2012 2013 2014 2015 2016 2017 2018
2018 Wisconsin Agriculture Outlook Forum Wisconsin Corn Cash Receipts 2010 -2017 F Cash Receipts ($ million) 2, 500 2, 000 1, 500 1, 000 500 0 2010 -$51 M -4% Harvested Acres down 9% Yield 174 bpa, down 2% Farm Price down 1% 2011 2012 2013 2014 2015 2016 2017 2018
2018 Wisconsin Agriculture Outlook Forum Wisconsin Soybean Cash Receipts 2010 -2017 F Cash Receipts ($ million) 1, 200 1, 000 -$181 M -18% 800 600 400 200 0 2010 Harvested Acres up 10% Yield 47 bpa, down 15% Farm Price up 1% 2011 2012 2013 2014 2015 2016 2017 2018
2018 Wisconsin Agriculture Outlook Forum What about Costs? Hasn’t changed much! • 2017 farm costs up 1. 7% • Farmers have cut back on variable inputs • But increased fuel, labor and interest costs
2018 Wisconsin Agriculture Outlook Forum Wisconsin Net Farm Income in 2010 -2017 F Net Farm Income ($ billion) 4. 0 Estimate ranges $1. 6 B or -2% $2. 1 B or +27% 3. 5 3. 0 2. 5 $1. 9 B +15% 2. 0 1. 5 1. 0 0. 5 0. 0 2011 2012 2013 2014 2015 2016 2017 2018
2018 Wisconsin Agriculture Outlook Forum Wisconsin Land Values Up 9. 5% in 2017 (1. 1% increase in 2016) https: //www. usda. gov/nass/PUBS/TODAYRPT/land 0817. pdf
2018 Wisconsin Agriculture Outlook Forum 30% Average % change in cropland rental rate by district in 2017 37% 12% 5% 9% -1% 1% 3% 2%
2018 Wisconsin Agriculture Outlook Forum Average cropland rental rate by district in 2017 $69 $74 $91 Wisconsin state average cropland rental rate • $117/A in 2017 • up $10/A or 9% from 2016 $123 $85 $156 $174 $136 $137
2018 Wisconsin Agriculture Outlook Forum 2018 Projected Average Nutrient and Pest Control Expenses ($/A, Northern IL) Nutrient Expenses $200 Corn Soy $150 $100 <1% $50 $0 2011 2012 2013 2014 2015 2016 Pest Control Expenses $80 2017 Corn $60 2018 Soy 0% $40 $20 $0 2011 2012 2013 2014 2015 2016 2017 2018
2018 Wisconsin Agriculture Outlook Forum 2018 Projected Average Seed and Machinery Expenses ($/A, Northern IL) Seed Expenses $150 Corn Soy – 4% – 1% $100 $50 $0 2011 2012 2013 2014 2015 2016 2017 2018 Machinery Expenses $200 Corn Soy $150 – 3% $100 $50 $0 2011 2012 2013 2014 2015 2016 2017 2018
2018 Wisconsin Agriculture Outlook Forum Projected Cost & Farm Price (Northern IL) 7. 00 CORN 2018 Projected Margin = –$0. 77/bu = –$151/A 6. 00 5. 00 4. 00 3. 00 2011 2012 2013 Cost $/bu 16. 00 2014 2015 2016 2017 2018 Farm Price $/bu SOYBEAN 2018 Projected Margin = +$0. 98/bu = +$63/A 14. 00 12. 00 10. 00 8. 00 2011 2012 2013 Cost $/bu 2014 2015 2016 Farm Price $/bu 2017 2018
2018 Wisconsin Agriculture Outlook Forum National Milk Cost of Production Estimates and WI Farm Price $28 Operating Costs Total Costs $26 WI Farm Price $22. 89/cwt $24 $/cwt $22 $20 $19. 00/cwt $18 $16 $14 $13. 83/cwt $12 $10 Nov-15 May-16 Dec-16 Jun-17 Jan-18
2018 Wisconsin Agriculture Outlook Forum As capital drained due to tight margins, farms have increased borrowing, but rate of increase has slowed Debt: Asset Ratio Annual Change 2017 2016 2015 +0. 2% +3. 3% +4. 8% US Farm Debt: Asset Ratio = 12. 7% in 2017 https: //www. fsa. usda. gov/news-room/news-releases/2018/nr_2018_0119_rel_0006
2018 Wisconsin Agriculture Outlook Forum Chapter 12 Bankruptcy Filings by State (10/1/16 to 9/30/17, states with 5 or more) 45 40 35 30 25 20 15 10 5 MO MS NJ AZ OR ID OH MT PA WA AL VT IL NY SD TN MA IN VA NC AR FL NE IA KY MI PR LA TX KS CA WI GA 0 http: //www. uscourts. gov/statistics-reports/caseload-statistics-data-tables
2018 Wisconsin Agriculture Outlook Forum Chapter 12 Bankruptcy Filings by County (10/1/16 to 9/30/17) # bankruptcies 1 2 3 4 https: //www. theguardian. com/us-news/2017/dec/06/why-are -americas-farmers-killing-themselves-in-record-numbers
2018 Wisconsin Agriculture Outlook Forum Summary • Farm income for 2017 is up slightly, but 2018 does not look as good • Another year of tight margins, especially for corn and dairy • Farmers have reduced variable input spending about as much as they can • Land costs increased in 2017, especially in northern WI • Farmers are still financially stressed • https: //www. youtube. com/user/uwipm • Playlist: Grain Crops Management in Low-Margin Years
2018 Wisconsin Agriculture Outlook Forum Thanks for your Attention Paul D. Mitchell Professor, Agricultural and Applied Economics Extension Specialist, Cropping Systems Management Director, Renk Agribusiness Institute Co-Director, Nutrient & Pest Management Program 608 -265 -6514, pdmitchell@wisc. edu, @mitchelluw
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