Economic Report: 2024 Stays Challenging for Farmers
By Bradley Uken, Wisconsin Farm Bureau Federation
While the agricultural economy continues to evolve under the weight of significant global pressures, inflation, and a variety of domestic policies that are out of date and exacerbating existing issues, there are few bright spots for Wisconsin Farmers.
Significant improvement in milk prices over the past year has been welcome news, but revisions to the Federal Milk Marketing Orders now pending at the U.S. Department of Agriculture (USDA) will substantially reduce returns for farmers selling Class 3 milk (milk for cheese). For dairy farmers in the upper Midwest, the net impact of the various changes in the order, had they been in place from 2020 to 2023, would have reduced payments to farmers by $75 million a year.
Meanwhile, other commodities face a combination of increasing input costs, reduction in market prices and high volumes of existing holdover stocks putting downward pressure on prices. Grain prices were projected to fall ten percent in the most recent USDA forecast, and with holdover stocks just shy of thirty percent higher than last year and a bumper crop expected, agricultural economists are making bearish projections for pricing.
These developments come at the end of a year when the country has been operating on an extension of the outdated 2018 Farm Bill. While provisions in the bill have allowed some modest adjustments to account for market changes, bill authors at the time had no way to anticipate the impacts of a global pandemic, the highest inflation in forty years, or major geopolitical developments hitting prices for the products farmers buy and sell. Farm safety net programs like the Price Loss Coverage Program and Dairy Margin Coverage Program are tied to statutory reference prices and other standards set in law that must be updated for the programs to function as intended. Clearly, we need a new Farm Bill.
Unemployment rates remain historically low, and on-farm labor costs have continued to rise. According to USDA National Agricultural Statistics Services, farm labor rates were up 2-3% in October from the year prior, a lower increase than the 4-10% in the prior year, but still a substantial increase. (The range is dependent on the area of farm work.)
As much as farming is impacted by policy, the weather can have a more determinative impact. This year a very wet spring caused significant delays in planting, with some farmers not finishing until early July. The wet start gave way to a dry late summer and fall, creating unusual issues with shallow rooted corn. Even after the late start, the dry and warm extended fall had many farmers finishing harvests earlier than they have in years.
Wisconsin Farm Bureau continues to work to support farmers across the state. Having successfully lobbied for a very agriculture-friendly Wisconsin state budget, Wisconsin Farm Bureau has been directly involved in implementing the newly created Agricultural Roads Improvement Program (ARIP). Additionally, our members have seen the benefit of increased funding for the Ag in the Classroom program, and several programs within the Department of Agriculture, Trade, and Consumer Protection to improve the function and efficiency of Wisconsin farms.
Wisconsin agriculture is now a $116 billion industry that provides more than 350,000 jobs with nearly one in ten Wisconsinites employed directly in the industry. The farms and processing facilities that blanket much of our state come in all shapes and sizes and are anchor employers in our rural communities. The dollars that come from these facilities are spent over and over in local communities around the state. What’s good for Wisconsin farmers is truly good for Wisconsin.
As we come to the end of 2024, Wisconsin farmers face continued challenges. Wisconsin Farm Bureau will continue to work with policymakers and our agricultural partners to make sure Wisconsin is a place where farms not only survive but thrive, so we can continue to pass down our heritage and our ability to feed our state, nation and world, to future generations.
Uken is chief administrative officer (CAO) of the Wisconsin Farm Bureau Federation | The Wisconsin Farm Bureau Federation is the largest general farm organization in the state and serves as a voice for farmers. WFBF’s mission is to lead the farm and rural community through legislative representation, education, public relations, and leadership.
