1. 2018 Wisconsin Agricultural Outlook Forum
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
Livestream:
#WiAgOutlook

2. Thank You to Our Sponsors
2018 Wisconsin Agriculture Outlook Forum
Thank You to Our Sponsors

3. 2017 Farm Income and 2018 Cost Outlook
2018 Wisconsin Agriculture Outlook Forum
2017 Farm Income and 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, Madison WI

4. 2017 Farm Income & 2018 Cost Outlook
2018 Wisconsin Agriculture Outlook Forum
2017 Farm Income & 2018 Cost Outlook
US farm income is up slightly in 2017, in Wisconsin too
Projected 2018 costs imply negative margins for crops and dairy for many farmers
Farmers are financially stressed

5. 2018 Wisconsin Agriculture Outlook Forum
$96.9B+4%
$63.2B
+3%

6. 2018 Wisconsin Agriculture Outlook Forum

7. 2018 Wisconsin Agriculture Outlook Forum

8. 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)

9. Wisconsin Dairy Cash Receipts 2010-2017F
2018 Wisconsin Agriculture Outlook Forum
Wisconsin Dairy Cash Receipts F
+$454 M +9%
Monthly production up 1.4% on average
Monthly mailbox price up 13% on average

10. Wisconsin Beef Cash Receipts 2010-2017F
2018 Wisconsin Agriculture Outlook Forum
Wisconsin Beef Cash Receipts F
+$56 M +3%

11. Wisconsin Corn Cash Receipts 2010-2017F
2018 Wisconsin Agriculture Outlook Forum
Wisconsin Corn Cash Receipts F
-$51 M
-4%
Harvested Acres down 9%
Yield 174 bpa, down 2%
Farm Price down 1%

12. Wisconsin Soybean Cash Receipts 2010-2017F
2018 Wisconsin Agriculture Outlook Forum
Wisconsin Soybean Cash Receipts F
-$181 M
-18%
Harvested Acres up 10%
Yield 47 bpa, down 15%
Farm Price up 1%

13. What about Costs? Hasn’t changed much!
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

14. Wisconsin Net Farm Income in 2010-2017F
2018 Wisconsin Agriculture Outlook Forum
Wisconsin Net Farm Income in F
$1.9 B
+15%

15. Wisconsin Land Values Up 9.5% in 2017 (1.1% increase in 2016)
2018 Wisconsin Agriculture Outlook Forum
Wisconsin Land Values Up 9.5% in 2017 (1.1% increase in 2016)

16. 2018 Wisconsin Agriculture Outlook Forum
30%
37%
12%
Average % change in cropland rental rate by district in 2017 5% 9% 3%
-1% 1% 2%

17. 2018 Wisconsin Agriculture Outlook Forum
Average cropland rental rate by district in 2017
$69
$74
$91
$123
Wisconsin state average cropland rental rate
$117/A in 2017
up $10/A or 9% from 2016
$85
$136
$156
$174
$137

18. 2018 Wisconsin Agriculture Outlook Forum
2018 Projected Average Nutrient and Pest Control Expenses ($/A, Northern IL)
<1% 0%

19. 2018 Projected Average Seed and Machinery Expenses ($/A, Northern IL)
2018 Wisconsin Agriculture Outlook Forum
2018 Projected Average Seed and Machinery Expenses ($/A, Northern IL)
– 4%
– 1%
– 3%

20. Projected Cost & Farm Price (Northern IL)
2018 Wisconsin Agriculture Outlook Forum
Projected Cost & Farm Price (Northern IL)
CORN 2018 Projected Margin = –$0.77/bu = –$151/A
SOYBEAN 2018 Projected Margin = +$0.98/bu = +$63/A

21. National Milk Cost of Production Estimates and WI Farm Price
2018 Wisconsin Agriculture Outlook Forum
National Milk Cost of Production Estimates and WI Farm Price
$22.89/cwt
$19.00/cwt
$13.83/cwt

22. 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
+0.2%
2016
+3.3%
2015
+4.8%
US Farm Debt:Asset Ratio = 12.7% in 2017

23. 2018 Wisconsin Agriculture Outlook Forum
Chapter 12 Bankruptcy Filings by State (10/1/16 to 9/30/17, states with 5 or more)

24. Chapter 12 Bankruptcy Filings by County (10/1/16 to 9/30/17)
2018 Wisconsin Agriculture Outlook Forum
Chapter 12 Bankruptcy Filings by County (10/1/16 to 9/30/17)
# bankruptcies 1 2 3 4

25. 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
Playlist: Grain Crops Management in Low-Margin Years

26. 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