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Outline for Presentation

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  1. An Overview of Wisconsin and US Agricultural EconomyBruce L. JonesDirector, Renk Agribusiness InstituteAugust 2013

  2. Outline for Presentation • Wisconsin Ag Financial Status • Diversification & Dairy Farm Performance • Farm Bill Issues • Ag Enterprise Performance • USDA Long Term Outlook • Farmland Values: Wisconsin and Neighboring States

  3. Dairy

  4. Livestock

  5. *Total production of beef and pork **Volume in million dozen and price in cents/dozen. See source for pricing points. Source: USDA, Livestock, Dairy and Poultry Outlook, December 2011 and December 2012.

  6. Corn and Soybeans

  7. * December Estimate ** December Forecast. Source: USDA, World Agricultural Supply and Demand Estimates.

  8. * December Estimate ** December Forecast. Source: USDA, World Agricultural Supply and Demand Estimates.

  9. Diversification and Dairy Farm Performance

  10. Sample Dairy Operations

  11. Hay price (PH) as a function of corn price (PC) • PH = 70.39 + 15.73 PC (6.65) • R2 = .9046

  12. Soybean price (PS) as a function of corn price (PC) • PS= 1.6299 + 1.9126 PC(14.18) • R2 = .9306

  13. Soybean Meal price (PSBM) as a function of soybean price (PS) • PSBM= 36.7135 + 27.917 PS (16.017) • R2 = .9379

  14. Cropping Assumptions

  15. Dairy Assumptions

  16. Assumed Market Conditions

  17. Results

  18. Farm Bill Issues

  19. Likely 2013 Farm Bill Subsidized crop insurance – Voluntary Reduced protections for dairy Dairy Security Act -- Senate Dairy Freedom Act -- House

  20. Dairy Security Act • Dairy Producer Margin Protection Plan • Voluntary • “Guarantees” producers $4/CWT Income over Feed Costs (IOFC) on 80% historic production • Producers can purchase higher IOFC protection • Administrative fee of up to $2500 • Requires participation in Dairy Market Stabilization Program – Supply Control

  21. Dairy Freedom Act • Voluntary • Margin insurance program where payments of higher premiums can increase IOFC per CWT guarantee from $4 to as much as $8

  22. Enterprise PerformanceUSDA-ERS ARMS