Leading with Optimism Through Challenge
By Kevin Krentz, WFBF President
As we turn the page and close the chapter on the year 2021, it is certainly a year of reflection for those of us in Wisconsin agriculture. Coming off of a year that challenged us in more ways that we could count, we came into 2021 with a sense of optimism. As life slowly but surely progressed back to a resemblance of normal, we looked forward to the year ahead.
However, optimism was met with continued concern. Major supply chain disruptions that we first saw as a result of the pandemic in 2020 extended well into 2021, as well. The rising cost of inflation, now sitting at 6.2 percent, deeply hit the agriculture community on everything from equipment to fertilizer input costs. Combined with volatile fuel costs and extensive labor shortages across every industry, the cost of debt continues to rise for Wisconsin farmers.
These concerns are nothing to take lightly. Here in Wisconsin, agriculture contributes $104.8 billion to the state’s economy with over 64,700 farms on 14.3 million acres. When agriculture struggles, we all struggle. When looking at the aforementioned issues, there is a lot of discussion as to whether these challenges are transitory or short-term. However, farmers feel these issues will last well beyond 2022, specifically when looking at things like increased labor rates.
So where do we go from here? Known as the Dairy State and home to 6,700 dairy farms — more than any other state — Wisconsin needs to see change in the dairy markets. We need a market that allows for more products to be priced while creating more transparency within the market and the depooling process.
Additionally, we need to adequately address the labor shortages we are seeing in agriculture — especially within the dairy industry. Agriculture needs an immigration system that works here in Wisconsin and across the United States. This would entail the administration having a strong foreign policy. One that would protect our borders, allow for adequate immigration to fill our job needs and promote agriculture exports across the globe. This would create food security domestically while giving our farmers the ability to compete globally in the climate smart commodity markets. One that we are very well suited for.
Twenty-first century agriculture needs twenty-first century infrastructure. We have an aging infrastructure, and it needs updating. Ports and rail along with local roads help our value-added products make it around the globe. Broadband is essential. Connecting farmers with consumers along with monitoring crops and livestock in real-time takes reliable broadband that will help next generation farmers be successful.
Wisconsin Farm Bureau Federation’s mission is “empowering the Wisconsin agricultural community through our grassroots membership to preserve and promote the advancement of agriculture”. Each year, county voting members set the policy that guides WFBF on local, state and national affairs. Our members look at challenges like these and set policy with the intention of moving Wisconsin agriculture forward.
Our members develop policies that guide us towards viable solutions. It can be beneficial for farmers to look at these operational challenges as opportunities. Knowing their cost of production and having proactive marketing plans allows farmers to remain successful in volatile markets when margins continue to tighten.
Despite these challenges, there is still plenty for agriculture to be optimistic about. Commodity markets provided a renewed sense of optimism in 2021 as we saw inverted grain markets this fall. The rising commodity prices we experienced throughout the fall are a phenomenon we do not typically see and gives farmers a thread of hope moving into 2022.
As we leap into the coming year, it is important to remember that markets still remain volatile. Now is a good time for farmers and their lenders to consider risk management strategies for the next season. There are many variables that farmers cannot control but being prepared, knowing their bottom line and being proactive will help them remain positive going into the new year.
Wisconsin Farm Bureau Federation is the state’s largest general farm organization, representing farms of all sizes, commodities and, management styles. There are more 46,000 members that belong to WFBF. Voting Farm Bureau members annually set the policy the organization follows, and are involved in local, state and national affairs, making it a true grassroots organization.