Status of the Wisconsin Farm Economy
By
Bruce L. Jones
UW-Madison
Topics Covered
Balance Sheets & Income Statements
For 1981 - 1985 and 1994 - 1998
Trends in Corn and Dairy Enterprises
Wisconsin Real Estate Markets
Positive Factors In Tough Times
Balance Sheets & Income Statements
For 1981 - 1985 and 1994 - 1998
Wisconsin Farm Balance Sheet
(Billions of $)
81
82
83
84
85
28.36
27.87
26.84
24.32
22.01
3.26
2.98
3.36
3.12
3.45
3.18
3.69
3.16
3.49
2.90
Equity
22.12
21.38
20.21
17.47
15.62
R/E as % Farm Assets
65.71
64.79
65.05
60.15
57.98
Asset to Equity
1.28
1.30
1.33
1.39
1.41
Debt/Asset
0.22
0.23
0.25
0.28
0.29
Farm assets
Debts:
Real estate
Nonreal estate
Wisconsin Farm Balance Sheet
(Billions of $)
94
95
96
97
98
24.43
25.33
25.96
26.25
26.50
2.45
2.51
2.57
2.61
2.63
2.73
2.75
2.88
2.86
2.96
Equity
19.46
20.15
20.60
20.62
20.68
R/E as % Farm Assets
57.61
60.00
60.24
62.76
64.19
Asset to Equity
1.26
1.26
1.26
1.27
1.28
Debt/Asset
0.20
0.20
0.21
0.21
0.22
Farm assets
Debts:
Real estate
Nonreal estate
Wisconsin Net Farm Income
81
82
83
84
85
Final crop output
Final animal output
Services and forestry
1.0893
4.1473
0.6475
1.0754
4.1103
0.7213
0.5828
4.1643
0.6229
1.1186
4.1845
0.3636
0.9731
4.0040
0.3653
Final agricultural sector output
5.3667
5.3542
4.9052
5.4847
5.1769
Intermediate consumption outlays
2.4363
2.3808
2.5942
2.6267
2.3553
Net government transactions
-0.2404
-0.1867
-0.1049
-0.0325
-0.1276
Gross value added
2.6900
2.7867
2.2062
2.8255
2.6939
1.0264
1.2207
1.1800
1.0389
0.9408
Net value added
1.6636
1.5660
1.0261
1.7866
1.7531
Total hired labor
Net rent to nonoperator landlords
Interest
0.2481
0.0624
0.6768
0.2737
0.0455
0.7560
0.2597
0.0257
0.7494
0.2597
0.1239
0.7287
0.2597
0.1115
0.6777
Net farm income
0.6764
0.4908
-0.0086
0.6742
0.7042
Return to Asset
1.3531
1.2469
0.7408
1.4029
1.3820
Profit Margin
0.2521
0.2329
0.1510
0.2558
0.2669
Capital consumption
Wisconsin Net Farm Income
94
95
96
97
98
Final crop output
Final animal output
Services and forestry
1.7969
3.9999
0.5384
1.5782
3.9076
0.5861
1.8018
4.2651
0.6184
1.8666
3.9343
0.7100
1.6952
4.4257
0.6919
Final agricultural sector output
6.0439
5.7488
6.3513
6.1640
6.4512
Intermediate consumption outlays
3.2908
3.2324
3.2035
3.5049
3.3987
Net government transactions
-0.1869
-0.2556
-0.2846
-0.2834
-0.2001
Gross value added
2.5663
2.2608
2.8632
2.3757
2.8524
0.8943
0.9051
0.9098
0.9051
0.9052
Net value added
1.6719
1.3556
1.9534
1.4707
1.9472
Total hired labor
Net rent to nonoperator landlords
Interest
0.4890
0.3889
0.4101
0.4513
0.2912
0.4425
0.5002
0.3889
0.4665
0.5286
0.3695
0.4840
0.5700
0.3216
0.5086
Net farm income
0.3840
0.1707
0.5978
0.0885
0.5469
Return to Assets
0.7941
0.6132
1.0643
0.5725
1.0556
Profit Margin
0.1314
0.1067
0.1676
0.0929
0.1636
Capital consumption
Measure
1981
1982
1983
1984
1985
Turnover
.189
.192
.183
.226
.235
Profit margin
.252
.233
.151
.256
.267
ROROA
4.77
4.47
2.76
5.77
6.28
ROROE
3.06
2.30
-.04
3.86
4.51
Measure
1994
1995
1996
1997
1998
Turnover
.247
.227
.245
.235
.243
Profit margin
.131
.107
.168
.093
.164
ROROA
3.25
2.42
4.10
2.18
3.98
ROROE
1.97
.85
2.90
.43
2.64
Trends in Corn and Dairy Enterprises
US Corn Yield per Acre
Source: ERS - USDA
140
Bushels per Acre
130
120
110
100
90
80
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998
Yield per Acre
US Planted Acres of Corn
Source: ERS - USDA
85000
80000
1000s
75000
70000
65000
60000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998
US Corn Price
Source: ERS - USDA
3. 5
$ per Bushel
3
2. 5
2
1. 5
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998
Dollars per Bushel
US Ave. Cash Corn Production Costs
Source: ERS - USDA
1. 6
1. 5
$ per Bushel
1. 4
1. 3
1. 2
1. 1
1
0. 9
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998
Dol lar s pe r Bushel
Index of Yield and Planted Acres
Source: ERS - USDA
160
1980 = 100
140
120
100
80
60
1981
1983
1985
1987
1989
Yield per Acre
1991
1993
1995
Planted Acres
1997
Index of Corn Yield & Price
Source: ERS - USDA
160
140
1980 = 100
120
100
80
60
40
1981 1983 1985 1987 1989 1991 1993 1995 1997
Yield per Acre
Price per Bushel
Index of Corn Price & Cash Cost
Source: ERS - USDA
160
1980 = 100
140
120
100
80
60
1981 1983 1985 1987 1989 1991 1993 1995 1997
Price per Bushel
Cash Cost per Bushel
Key Corn Trends ( 1980 – 1998 )
Annual Growth in Prices
0%
Annual Growth in Cost of Production
0%
Growth in :
Acreage
Bushel per Acre
Cost of Inputs
Inputs
0%
1.53 %
1.99%
-.45 %
US Milk per Cow
Source: ERS-USDA
18000
17000
Pounds Milk
16000
15000
14000
13000
12000
11000
1980
1983
1986
1989
1992
Year
Milk per cow
1995
1998
US Dairy Herd
Source : ERS-USDA
11500
1000s of Cows
11000
10500
10000
9500
9000
1980
1983
1986
1989
1992
Yea r
Cows in Herd
1995
1998
US Milk Price
Source: ERS-USDA
16
15. 5
$ per CWT
15
14. 5
14
13. 5
13
12. 5
12
1980
1983
1986
1989
Yea r
Mil k Pri ce
1992
1995
1998
US Milk Production Costs
Source: ERS-USDA
10
9. 5
$ per CWT
9
8. 5
8
7. 5
7
6. 5
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998
Year
Cash Costs
Index of Milk per Cow and Herd
Source : ERS-USDA
150
140
1975 = 100
130
120
110
100
90
80
1980
1982
1984
1986
1988 1990
Yea r
Mil k per c ow
1992
Herd
1994
1996
Index of Milk per Cow and Milk Price
Source: ERS-USDA
150
140
1975 = 100
130
120
110
100
90
1980 1982 1984 1986 1988 1990 1992 1994 1996
Year
Milk per cow
Milk Price
Index of Milk Price & Price to Cost
Source: ERS-USDA
120
110
1975 = 100
100
90
80
70
60
1980 1982 1984 1986 1988 1990 1992 1994 1996
Year
Milk Price
Price to Cost
Key Dairy Trends ( 1980 – 1998 )
Annual Growth in Prices
Annual Growth in Cost of Production
0%
1.94 %
Growth in :
Herd
Milk per Cow
Cost of Inputs
Inputs
-1.13 %
2.17 %
1.99 %
0.79 %
Output
0.84 %
Wisconsin Real Estate Markets
Value of Wisconsin Farm Land
Per Acre Selling Prices
3 00 0
2 50 0
2 00 0
1 50 0
1 00 0
5 00
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99
Yea r
Div erted from fa rming
Co ntinuing in fa rming
WI Farm Land Values & Income
200
180
1985 = 100
160
140
120
100
80
60
86 87 88 89 90 91 92 93 94 95 96 97 98 99
Year
Diver ted from farming
Continuing in farming
Adj. Net Far m I ncome
R/E Value Index es
2 60
2 40
2 20
2 00
1 80
1 60
1 40
1 20
1 00
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99
Yea r
Residentia l
Co mmercial
R/E Value Index es
300
250
200
150
100
50
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99
Yea r
Residentia l
Co mmercia l
No nAg La nd
Ag La nd
Real Estate Values
Growth in Values ( 1985 - 1999 )
Ag Land
Non Ag Land
4..48 %
5.22 %
Key Relationships
Ag & Non Ag
( 94 % )
1% Chg. Non Ag => .88 % Chg. Ag. Land
Non Ag & Residential
( 81 % )
1% Chg. Residential => .91 % Chg. Non Ag. Land
Residential & Per Capita Income
( 96 % )
1% Chg. Per Capita Income => 1.30 % Chg. Residential
Ag & Per Capita Income
( 73 % )
1% Chg. Per Capita Income => 1.03 % Chg. Ag. Land
During 1996 - 1999 Period
Grow th in S/E District land Values
Ag
Non Ag
18.06 %
13.14 %
Except for North-Central District
Rates of growth in Ag & Non Ag Land Values
the same as the S/E
N/C Ag Grow th lower but Non Ag no
different
Positive Factors In Tough Times
Positive Factors In Tough Times
Stable to Rising Real Estate Values Maintaining Farm Equity Base
Dual Income Farm Households
Low Unemployment and Good Prospects For Employment
Low and Stable Interest Rates