Wisconsin farmers didn't have their best year ever in 2013, but they didn't miss it by much. And, as usual, the overall financial performance of the state's farm sector reflected that of the dairy industry, which generates roughly half of the state's farm revenues, according to Ed Jesse, University of Wisconsin-Madison professor emeritus of agricultural and applied economics.
At $3.75 billion, Wisconsin net farm income was up about 14% in 2013, $550 million more than in
2012, and just short of the record $3.8 billion net farm income earned in 2011, said Jesse, editor of the annual Status of Wisconsin Agriculture report. The report was released at the UW's Wisconsin Agricultural Outlook Forum, Jan. 22.
Dairy led the way in terms of increased farm revenue. Gross milk sales in 2013 were a record $5.6 billion, about $400 million more than 2012. Wisconsin farmers added 3,000 more cows and produced about 1.7% more milk per cow (averaging 22,000 lbs.) in 2013 compared to a year earlier. In addition, they were paid the second-highest average milk price on record, at $20.25/cwt. High feed costs cut into the net earnings of those who purchased most of their feed, the report noted.
Wisconsin's estimated milk production of 27.7 billion lbs. set a new record for the fifth year in a row. Wisconsin milk production has shown remarkable improvement since 2004, when the state reversed a 16-year decline in cow numbers.
But the state's farm revenues and profits may be down a bit in the year to come, the report warned. Milk production is expected to increase because of cheaper feed prices in the United States and improved weather in Europe and New Zealand, source of most of the world's dairy exports. The report's authors say average milk prices paid to Wisconsin farmers could drop 75¢ to $1/cwt. from 2013"s average.
Offsetting that, last year's huge harvest will weigh heavily on the corn and soybean market. Those lower feed costs in 2014 means the milk price-feed cost margin will show a much smaller drop than the milk
price, keeping income over feed costs close to 2013 for those dairies buying feed.
Three straight years of good income and rising land prices have strengthened state's farmers collective balance sheet. The value of Wisconsin farm assets was $75.5 billion at the beginning of 2013, up 8% from a year earlier. At the same time, farm debt dropped 8% to $8.37 billion. The state's farmers owe $11 in debt for every $100 in assets – a very healthy financial position.
The Status of Wisconsin Agriculture 2014 is published by the Renk Agribusiness Institute in the UW-Madison's Department of Agricultural Economics and authored by UW-Madison and UW-Extension ag economists and commodity specialists. The report is available free online at http://www.aae.wisc.edu/pubs/status.