Wisconsin Ag Groups Appreciate Farmer Aid

Wisconsin Ag Groups Appreciate Farmer Aid

May 20, 2020

Today, eight organizations thanked Gov. Tony Evers for allocating $50 million in federal funding for direct aid for Wisconsin farmers. These farm groups appealed to Evers last month for direct cash relief for Wisconsin’s farmers who have been hit especially hard during the COVID-19 pandemic.   

The governor today announced the Wisconsin Farm Support Program, which will provide $50 million in payments to the state’s farmers. He is also applying $15 million to a Food Security Initiative.   

 Wisconsin Farm Bureau Federation, Dairy Business Association, Wisconsin Corn Growers Association, Wisconsin Soybean Association, Wisconsin Pork Association, Wisconsin Cattlemen’s Association, Wisconsin State Cranberry Growers Association and Wisconsin Potato & Vegetable Growers Association released the following statement jointly.   

 “We appreciate Governor Evers acknowledging the direct need of our state’s farmers with today’s announcement of $50 million in direct payments.     

“The pandemic’s crushing economic effects on our commodity markets are unprecedented. The crisis severely twisted our supply chains, devastated our labor force and created anxiety for our customers. COVID-19 will likely bankrupt many multi-generational farms in Wisconsin.   

“We know that these payments will not make up what our farmers have lost financially. However, this assistance will provide support to help them cash flow and continue their vital mission of providing food to our nation during this crisis.

“We also are grateful that Wisconsin communities will benefit from the Food Security Initiative. This pandemic has impacted many families, and farmers are committed to helping those in need.”    

Last month, the farm groups sent a letter to Evers making a case for the $50 million. They calculated the economic impact of the pandemic on agricultural sectors. Those estimated losses (below) are growing daily.   

Dairy: This sector has experienced an 87¢/cwt decline in February 2020 and a $1.74/cwt decline in March 2020. This equates to a $66 million loss in Wisconsin milk revenue for those two months. Going forward, the projected decline estimates approximate losses $6/cwt, which will result in hundreds of millions of dollars in losses. In addition to losses from plummeting prices, many dairy farmers in Wisconsin have been asked to dispose of milk or cut production, which causes even greater difficulties for those farms as they try to stay in business.   

Pork: Currently, 10 percent of the U.S. pork processing capacity is closed. Twenty-five percent of the Wisconsin hog market has been lost due to the shuttering of the food service industry. At this time, projected Wisconsin hog production losses (not including processing losses) is $44.4 million.    

Beef: The beef industry has been faced with losing 25 percent of its packing capacity in addition to a $25/cwt pullback in cash prices since Feb. 1. In Wisconsin, each segment of the industry faces extreme losses: 310,000 cow-calf operations with a loss of $247.15/head, 250,000 cattle of feed with a loss of $205.96/head, and 340,000 stocker calves with a loss of $159.98/head. This equates to approximately $180-$200 million loss to Wisconsin’s beef industry in 2020.     

Potatoes: Approximately, 500,000 cwt of potatoes have been displaced and there has been a 1,119,895 cwt contract reduction for 2020, which equals current immediate estimated losses of $17 million. In addition, the massive reduction in foodservice sales due to coronavirus has resulted in an oversupply situation for the U.S. potato industry that will result in a predicted loss of $100 million for Wisconsin potato growers on their 2020 crop.   

Cranberries: Out-of-home consumption of cranberries has declined by more than 60 percent and convenience store sales have declined by 20 percent. Grower prices had just started to rebound from $10-$15 per cwt to ranges in the mid-$20 range. We fully expect declines in the future due to lost sales and export markets. Exports to China, EU and UK have declined by more than $31 million due to retaliatory tariffs. Considering the pandemic, rebuilding these markets will be challenging.   

Soybeans: Prices have declined $0.65-$0.75/bushel and costs have increased $0.25-$0.35/bushel equating to projected losses of $1.00/bushel. Wisconsin produces between 80 million and 100 million bushels of soybeans annually. Current projected losses are $80-$100 million.   

Corn: As of Mid-April, cash corn prices have declined by 16 percent on average, with several regions experiencing declines of more than 20 percent. Forecasting prices through the rest of the 2019 crop marketing year shows a $50/acre revenue decline for corn compared to a $10/acre drop for soybeans. (Actual revenue losses will depend on how much corn a producer currently has to market.) Wisconsin corn acres in the last 2019 were 2.68 million acres and in 2020 there will be an estimated 8 percent increase. Corn will be one of the most impacted crops as its two largest uses – livestock feed and ethanol – are under pressure. Impacts of reduced livestock demand are just beginning to come to bear in the market, as livestock processing plants are beginning to be disrupted.

Posted: May 20, 2020