Financial Report Card For Wisconsin Agriculture
Presented By
Bruce L. Jones
UW Center For Dairy Profitability
January 2000
Center for Dairy Profitability
1
Financial Status of Wisconsin Farming
Financial Performance of Upper-Midwest Farms
Real Estate Markets
Dairy Performance
Importance of Dairy Development to Wisconsin
Center for Dairy Profitability
2
Financial Status of Wisconsi n Farming
Center for Dairy Profitability
3
Wisconsin Farm Balance Sheet
Source: ERS-USDA
B illio n s o f $
30
25
20
15
10
5
0
70
75
80
85
90
95
100
Year
Assets
Debts
Center for Dairy Profitability
4
Wisconsin Farm Assets
Source: ERS-USDA
25
B illio n s $
20
15
10
5
0
70
75
80
85
90
95
100
Year
Liquid Farm Assets
Real Estate & Machinery
Center for Dairy Profitability
5
Wisconsin Farm Debts
Source: ERS-USDA
4
B illio n s $
3.5
3
2.5
2
1.5
1
0.5
70
75
80
85
90
95
100
Year
Non- Real Estate Debt
Real Estate Debt
Center for Dairy Profitability
6
Liquidity of Wisconsin Farms
Source: ERS-USDA
7
B illio n s $
6
5
4
3
2
1
0
70
75
80
85
90
95
100
Year
Liquid Assets
Non Real Estate Debt
Center for Dairy Profitability
7
Wisconsin Farm Debt to Asset
7
28
6
P ercen t
30
26
5
24
4
22
3
20
2
18
1
70
75
80
85
90
95
B illio n s $
Source: ERS-USDA
100
Year
Debt to Asset
Farm Debt
Center for Dairy Profitability
8
Wisconsin Farm Income
Source: ERS-USDA
B illio n s o f $
7
6
5
4
3
2
1
0
-1
70
75
80
85
90
95
100
Year
Gross Income
Net Income
Center for Dairy Profitability
9
Wisconsin Farm Income
Source: ERS-USDA
7
B illio n s o f $
6
5
4
3
2
1
0
70
75
80
85
90
95
100
Year
Gross Income
Interest on Debt
Center for Dairy Profitability
10
Wisconsin Average Farm Interest Rate
Source: ERS-USDA
12
P ercen t
11
10
9
8
7
6
70
75
80
85
90
95
100
Year
Center for Dairy Profitability
11
Financial Performance of Upper-Midwest Farms
Center for Dairy Profitability
12
Debt to Asset
Source: ERS-USDA
35
30
25
20
15
10
1980
1985
1990
1995
2000
Year
WISC
IOWA
ILL
Center for Dairy Profitability
MICH
MINN
13
Farm Income Indexes
Source: ERS-USDA
1990 = 100
200
150
100
50
0
-50
1991
1992
1993
1994
1995
1996
1997
1998
Year
Wisc
Iowa
Illinois
Center for Dairy Profitability
Mich
Minn
14
Rate of Return on Assets
Source: ERS-USDA
8
P ercen t
6
4
2
0
-2
-4
1980
1985
1990
1995
2000
Year
WISC
IOWA
ILL
Center for Dairy Profitability
MICH
MINN
15
Debt Coverage
Source: ERS-USDA
2.4
P ercen t
2.2
2
1.8
1.6
1.4
1.2
1
1980
1985
1990
1995
2000
Year
WISC
IOWA
ILL
Center for Dairy Profitability
MICH
MINN
16
Real Estate Markets
Center for Dairy Profitability
17
Wisconsin Farm Land Values
Source: NASS
1400
1200
1000
800
600
400
200
0
1950
1960
1970
1980
1990
2000
YEAR
Center for Dairy Profitability
18
Farm Land Value Indexes
Source: NASS
170
1990 = 100
160
150
140
130
120
110
100
1991
1992
1993
1994
1995
1996
1997
1998
Year
WISC
IOWA
ILL
Center for Dairy Profitability
MICH
MINN
19
Acres of Wisconsin Farm Land Sold
400000
350000
300000
250000
200000
150000
100000
50000
0
85
86
87
88
89
90
91 92
Year
Diverted from farming
93
94
95
96
97
98
Continuing in farming
Center for Dairy Profitability
20
Value of Wisconsin Farm Land
Per Acre Selling Prices
2200
2000
1800
1600
1400
1200
1000
800
600
85
86
87
88
89
90
91 92
Year
Diverted from farming
Center for Dairy Profitability
93
94
95
96
97
98
Continuing in farming
21
Wisconsin Farm Land Sales
Number of Transactions
6000
5000
4000
3000
2000
1000
92
93
94
95
Year
Diverted from farming
96
97
98
Continuing in farming
Center for Dairy Profitability
22
Wisc Farm Land Diverted From Farming
35
P ercen t
30
25
20
15
10
85
86
87
88
89
90
91 92
Year
% Total Acres
93
94
95
96
97
98
% Total $ Sales
Center for Dairy Profitability
23
Farm Land Sales as % NFI
Land Diverted From Farming
25
P ercen t
20
15
10
5
0
85
86
87
88
89
90
91 92
Year
93
Center for Dairy Profitability
94
95
96
97
98
24
Dairy Performance
Center for Dairy Profitability
25
IN D E X ( 1993 = 100 )
WISCONSIN MILK PRODUCTION TRENDS
120
110
100
90
80
70
94
95
96
97
98
YEAR
MILK PROD
HERDS
HERD SIZE
Center for Dairy Profitability
MILK PER COW
26
IN D E X ( 1993 = 100 )
WISCONSIN DAIRY HERDS
ALL FARMS
200
180
160
140
120
100
80
60
93
94
95
96
97
98
YEAR
0 - 29 COWS
30 - 49 COWS
100 - 199 COWS
200+ COWS
Center for Dairy Profitability
50 - 99 COWS
27
Annual Average Basic Formula Price
Source: NASS
$ P er C W T
16
14
12
10
8
6
4
1970
1975
1980
1985
Year
Center for Dairy Profitability
1990
1995
2000
28
Annual Average Basic Formula Price
Source: NASS
$ P er C W T
14.5
14
13.5
13
12.5
12
11.5
11
0
1
2
3
4
5
6
7
8
9
Year
1980 - 1989
1990 - 1999
Center for Dairy Profitability
29
Importance of Dairy Development to Wisconsin
Center for Dairy Profitability
30
WISCONSIN DAIRY TRENDS
WISCONSIN
DAIRY
30 TO
99
COWS
100 OR
MORE
COWS
YEAR
1998
YEAR
1998
HERD SIZE
54.08
NUMBER
OF HERDS
100 OR
MORE
COWS
30 TO 99
COWS
100 OR
MORE
COWS
5 YR.
TREND
5 YR.
TREND
YEAR
2003
YEAR
2003
170.85
0%
3.97 %
54.08
207.58
16200
2500
-4.79 %
0.93 %
12677.33
2619.40
MILK PER
COW
16164
18664
2.18 %
2.10 %
18004.47
20712.64
MILK PROD.
( BILLION #)
14.16
7.97
12.34
11.26
TOT. PROD.
30 TO 99
COWS
22.13
Center for Dairy Profitability
23.61
( + 7%)
31
CALIFORNIA DAIRY TRENDS
CALIFORNIA
DAIRY
30 TO
99
COWS
100 OR
MORE
COWS
YEAR
1998
YEAR
1998
HERD SIZE
71.00
675.18
NUMBER
OF HERDS
200
MILK PER
COW
MILK PROD.
( BILLION #)
TOT. PROD.
30 TO 99
COWS
100 OR
MORE
COWS
30 TO 99
COWS
100 OR
MORE
COWS
5 YR.
TREND
YEAR
2003
YEAR
2003
2.86 %
3.73 %
81.79
810.89
2080
-8.15 %
0%
130.78
2080
15553
19481
0%
0%
15553
19481
.22
27.36
.17
32.86
5 YR.
TREND
27.58
Center for Dairy Profitability
33.02
( + 20%)
32
POTENTIAL ECONOMIC IMPACT OF DAIRY
MODERNIZATION IN WISCONSIN
Projected decrease in farms of 30 to 99 cows is roughly
3500
With modernization this decline in farm numbers could
be reduced.
Center for Dairy Profitability
33
Possible outcome of modernization
Retain 1200 dairy farms ( roughly a third
of farms likely to exit ) and have these
farms grow to an average herd size of 100
cows
Result of this turn-around
Increased milk production of @
1.92 billion pounds of milk worth
roughly $230.4 million
Center for Dairy Profitability
34
Value Added ( Based on economic multipliers estimated by Steve Deller )
Farm Sector
$.12 value-added per $1 gross income
$230.4 million in gross income yields $27.65 million value-added
Farm Service Sector
$2.59 value-added per $1 farm sector value-added
$27.65 million farm value-added yields $71.61 million service sector
value-added
Dairy Processing
$1.36 value-added per $1 farm gross income
$230.4 million in gross dairy farm income yields $255 million dairy
processing value-added
Total Value-added
324.26 million from the retention and growth of 1200 dairy farms
Center for Dairy Profitability
35
Employment ( Based on economic multipliers estimated by Steve Deller )
Ag service sector & Dairy processing sector employment rates
23 jobs per $1 million of value-added
$71.61 million of value-added for ag service sector yields 1647 jobs
$225 million of value-added for dairy processing sector yields 5175 jobs
@6800 jobs gained from the retention and growth of 1200 dairy farms
Center for Dairy Profitability
36