Capitol Update
by Senator Howard Marklein
February 2, 2024
An Insider’s View of the Economic Outlook for Ag in 2024
The Ag Economic Outlook Forum was held at the University of Wisconsin-Madison on Tuesday, January 23, 2024. UW-Madison’s Renk Agribusiness Institute hosts this event every year and I always look forward to hearing the research and analysis shared by agricultural economists and industry experts. This briefing provides an insider’s view of the outlook for agriculture with all kinds of data, graphs and charts. My favorite!
The overall economic outlook for agriculture in 2024 is good. All of the experts who presented at the forum predict a better year than last year. They cite consumer behaviors, weather predictions and global prices as positive indicators that agriculture – across the industry – will have a good year, this year.
Paul Mitchell, the director of the Renk Institute, said the strong growth farmers have seen since COVID-19 is beginning to slow down. Farm income was down 20% in 2023 after a record year in 2022. While a 20% decrease from last year may seem like a steep drop, it is still an increase of 31% over the 20-year average.
Declining income this year came from prices across the industry falling from 2022 levels. The prices of corn, soybeans, beef, chicken, pork, and dairy products all fell this year, while industry costs remained steady. Land value is increasing, which is helping farm balance sheets, but it is acting as a deterrent for young people who are interested in getting into the industry.
It comes as no surprise that the drought this summer also hurt farmers. There was a lower share of corn and soybeans in excellent condition than there have been in years past. This contributed to fewer of each crop being produced than last year.
The dairy industry also struggled last year. Professor Chuck Nicholson said that 2023 was not a good year for the dairy industry. Over the summer, milk prices fell 43% from their peak in the spring of 2022. Using the average for the entire year, milk prices were down 16%. When you combine falling prices with high costs for feed and low exports, 2023 was not good for Wisconsin dairy farmers. Fortunately, Professor Nicholson was optimistic about the outlook for 2024, saying that he believes the worst is behind us, and we are on the way out of a trough for global milk prices. He believes that 2024 will be a much better year.
Professor Brenda Boetel, from UW River Falls, said that domestic consumption of beef, chicken, pork, and turkey were all down this past year. This caused domestic prices to fall across the board. However due to a strong export market, livestock farmers did not see too much damage to their bottom line. Looking forward to 2024, Professor Boetl projects a rise in production in chicken, pork, and turkey. Beef production and consumption will continue to tick down. She said that even while the number of beef cows in the United States as a whole has fallen 3%, in Wisconsin our beef herd has actually grown by 7%.
Overall, 2023 was not a banner year for those in the agriculture industry, but there are positive indicators for 2024. I will continue to monitor this industry and work with local farmers to put them in the best possible position to succeed. In fact, January 31, 2024 was Ag Day in the Capitol and it was wonderful to spend the day with farmers from all over the 17th Senate District.
The Agricultural Economic Outlook Forum is a fantastic event. You can view all the videos and materials from the Forum on the Renk Institute’s website and YouTube: https://renk.aae.wisc.edu/2023-agricultural-outlook-forum/ I encourage you to take a look.
As always, please do not hesitate to connect with me to provide input, ideas or to seek assistance. Send an email to sen.marklein@legis.wisconsin.gov or call 608-266-0703.
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