Agriculture is one of Wisconsin’s oldest industries, but remains one of its most important. Last year was a very good year for farmers, as rising commodity prices and a weak U.S. dollar led to an increase in agriculture exports.
A strong agricultural economy not only benefits Wisconsin farmers, but also their communities, and the banks and equipment manufactures that they patronize.
“The agriculture industry in Wisconsin has always been a major driver to our economy, but we’ve seen a lot more attention thanks to the good economic progress the industry has enjoyed the past few years,” said Bruce Jones, agricultural economist at the University Wisconsin Madison.
Wisconsin’s net farm income set a new record in 2011, and experts predict 2012 to be another strong year on the farm.
According to Jones, co-author of The Status of Wisconsin Agriculture report, 2011 success was driven by record prices for corn, soybeans, milk, cattle and hogs. The report estimates that the state’s farmers collectively earned a record $2.4 billion in net farm income which is up 17 percent from 2012 and three times higher than what the farmers earned in 2009.
“Commodity prices have been good,” Jones said. “Farmers are seeing a good demand for the products we have here in Wisconsin and their profits have seen a jump as a result.”
Jones predicts that corn and soybean prices will continue to be high throughout 2012 as world demands for those products stay strong. Milk prices, he predicts could see some decline, however.
“(Wisconsin farmers) have seen expanded markets for (their) goods,” Jones said. “The low value of the dollar has increased the affordability of our product relative to other significant currencies. We expect that trend to continue, particularly as the economic growth of countries like India and China continues to expand.”
According to Jones, the increase in the size of the middle class and the economic development in developing countries will increase the demand for more higher-end food products including more beef, pork and dairy products.
“We see a growth in the standard of living in some countries that will demand higher end food products,” Jones said. “Wisconsin farmers are in a good position to meet those demands.”
The U.S. Department of Agriculture indicates that the state of Wisconsin has a total commodity value of $8.9 million. Dairy products make up more than half of that value at about $4.5 million. Cattle and calves contribute an additional $1 million to the state’s commodity value.
Wisconsin is No. 2 in milk production and one of the top 10 states in corn production, Jones said.
“We are also among the leaders in production of vegetable crops and cranberries,” he added.
However, so much of Wisconsin’s agriculture success depends on a broad range of uncertain factors, including droughts and crop yields at home and in neighboring states, as well as how a weaker euro and a stronger dollar might stall U.S. exports, Jones said.
“There does appear to be promise,” he said. “It’s a good situation for (Wisconsin) to be in. We hope that the economic conditions will continue to favor the agriculture economy here in the state.”
