Wisconsin Agricultural Economists Hopeful 2021 Will Bring Better Margins

Friday, January 29th, 2021 -- 10:00 AM

(Hope Kirwan, WPR) Wisconsin agricultural economists say they’re hopeful 2021 will bring better margins for farmers.

According to Hope Kirwan of Wisconsin Public Radio, questions about how quickly U.S. consumers and world markets will recover from the coronavirus pandemic mean the future remains uncertain.

Paul Mitchell, director of the Renk Agribusiness Institute at the University of Wisconsin-Madison, said farmers, like many people, faced a lot of stress in 2020.

He said the pandemic brought both emotional stress, as COVID-19 spread in rural areas, and stress for their profession, due to disruptions to supply chains and consumer eating habits.

But Mitchell said financial support from federal and state levels and an improvement in crop prices last fall has helped many producers start this year with a strong financial outlook.

Mitchell points out that agricultural land prices in the state have held steady in recent months and farm debt at commercial banks across the country declined by 8 percent over 2020.

He said the rate at which Wisconsin dairy farms are closing has also slowed. The number of registered dairy herds in the state this month was down about 5 percent compared to January 2020. Last year, that number had declined by 10 percent from the previous year.

But Mark Stephenson, director of dairy policy analysis at UW-Madison, said the dairy industry is not facing the same promising prices, mainly due to an increase in U.S. milk production.

Because of this oversupply, Stephenson projects prices could fall as much as 30 cents per hundredweight, or 100 pounds of milk, in 2021. And he expects prices will be volatile throughout the year.

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