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Jesse: farm income solid in ’12, weather sets stage for ’13 – Audio

Ed Jesse, Professor Emeritus
Department of Agricultural and Applied Economics
UW-Madison College of Agricultural and Life Sciences
evjesse@wisc.edu
Phone (608) 262-6348

Summing up 2012 Wisconsin farm income trends

3:02 – Total Time

0:21 – Recap of 2012 Wisconsin farm income
0:51 – Farm income by production
1:30 – Dairy farm income
1:58 – Improved milk production per cow
2:11 – What about 2012
2:52 – Lead out

TRANSCRIPT

Summing up the financial year for Wisconsin. We’re visiting today with Ed Jesse, Department of Agricultural and Applied Economics, University of Wisconsin in the College of Agricultural and Life Sciences, Madison, WI and I’m Sevie Kenyon.

Sevie Kenyon: Ed, what kind of year did the farmers just wrap up?

Ed Jesse: Surprisingly, it was a good year. We were down about $800 million from last year, which was a record year. So, we’re down from 2011 but substantially up by about $1 billion from 2010. So, it was a very good year and I say surprisingly because we had a severe drought, but we had higher prices for most commodities that offset some of the effect of the drought.

Sevie Kenyon: Ed, how do you parse those numbers out?

Ed Jesse: Well, crop revenue is down slightly because the high prices we saw were not enough to offset the reduction in production from the drought, which was down more than a quarter, but offsetting that will be some revenue from crop insurance. We don’t know how much that’s going to be but my guess is that crop producers will probably be profitable in 2012. Livestock revenues were up but at the same time livestock producers paid a lot more for inputs, notably feed, about $400 million more for their feed supplies because they ran out of feed. Those that were reliant on purchased feeds in general were pretty bad off in 2012. Those that had decent crops and produced most of their crops for their livestock did quite well.

Sevie Kenyon: Tell us a little bit about the dairy component this year?

Ed Jesse: Prices were not as high last year but we had more milk, so the total revenue from dairy is going to be just about same as it was in 2011 when we experienced record high milk prices. Surprising to me, we had increases in milk production per cow over last year, despite the very hot temperatures and that was the cause of the slightly higher revenue in 2012.

Sevie Kenyon: Any idea why we got more milk per cow?

Ed Jesse: I think we had better quality feed, even though there was less of it. For example, the hay was put up without any rain so there was a limited supply but what was there was excellent quality.

Sevie Kenyon: What do you see in the year ahead?

Ed Jesse: That’s a huge question mark. If we maintain soil moisture at levels that we’re starting going into the crop year of 2011 I think we’ll do quite well. If the drought continues into 2013 then we’re in a lot of trouble. I think feed supplies will dry up quickly and there will be insufficient feed to supply our dairy cattle and our other cattle and some liquidation will have to take place but right now I’m pretty optimistic. The snowfalls we’ve had, at least in our part of the state, have been substantial and I think that is replenishing the soil moisture quite nicely.

Sevie Kenyon: We’ve been visiting with Ed Jesse, Department of Agricultural and Applied Economics, University of Wisconsin in the College of Agricultural and Life Sciences, Madison, WI and I’m Sevie Kenyon.