2015-16 Blue Books
2015-16 Blue Books are a useful
summary of information about our state. These books are
printed every session and are complimentary for every resident
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Ag Economics Help Farm Families Plan for
Each year, I enjoy attending the Ag Economic Outlook Forum that
is hosted by the Renk Agribusiness Institute at the UW College
of Agriculture and Life Sciences. This forum offers a deep,
interesting analysis of the Wisconsin farm economy and forecasts
for the future of agriculture over the next several years. If
you would like to review the data, information and ideas
presented, please visit:
Overall, there wasn't much good news from the analysis or
forecast. Wisconsin net farm earnings fell nearly $1.6 billion
from 2014 to 2015. This swing is attributed, primarily, to milk
sales, which were down a similar amount. However, Wisconsin
farms are in a good position to manage slow economies. Farm
balance sheets are in good condition, despite the downturn in
2015 net income.
The equity-to-asset ratio has stayed close to 87% for the past
several years which keeps Wisconsin farms in a strong financial
position. According to the leadership of the forum, only 13% of
farm assets in Wisconsin are being financed with debt, leaving
significant collateral for farmers to use to seek loans and
financing in the future.
The 2015 slump in net farm income in Wisconsin has had an impact
on farm liquidity, which is the ability of a farm to meet
financial obligations as they come due as well as to generate
cash to pay family living expenses, income taxes, and make debt
payments on time. The liquidity of farms has slipped a bit,
according to the analysis shared at the forum. The analysts
believe that a decrease of $3.3 billion in net working capital
is an indicator that farmers have been drawing down cash
reserves and this is a concern as we face a tough economy.
However, I know that Wisconsin farmers are intelligent and
strategic. We will take the best information we have to make
good, thoughtful decisions while planning for the immediate
future and years to come.
The Economic Forum provides us with an abundant amount of data.
As your State Senator, I have attempted to digest the data
presented to provide you with a quick snapshot of the 181 pages
of information we received at the Forum. This information is
important for everyone in the 17th Senate District since the
vast majority of our communities depend on agriculture as a
According to Bruce Jones, Director of the Renk Agribusiness
Institute, overall farm income for 2015 was down by $1.6 billion
over 2014's results. Unfortunately, the United States Department
of Agriculture (USDA) significantly overestimated Wisconsin
agricultural net income for 2014 by 37%. They were off, in their
initial projections, by $1.5 billion.
Despite the incorrect forecasts, the productivity of American
agriculture continues to advance, with improvements in
technology and genetics. While the improved productivity
benefits American food consumers, it also puts pressure on
agriculture to expand our exports. We produce far more than
Americans can consume. We must export!
Unfortunately, the export market had significant head winds in
2015. The strength of our dollar put the price of our exports at
a competitive disadvantage compared to our foreign agricultural
competitors. For example, Brazilian corn enjoys a 40% price
advantage compared to American corn, based solely on the
strength of the dollar.
What is the Outlook for 2016?
Dairy - The dairy industry is the largest segment of
Wisconsin agriculture. Our dairy output in Wisconsin grew by
approximately 4% in 2015. Our per cow milk production exceeded
California’s cows for the first time in at least 60 years. The
dairy industry continues to shift from the southwest United
States to the Midwest. The shift is being driven by a
combination of the historic drought in California and the higher
cost of feed in California compared to Wisconsin.
While productivity improved for Wisconsin dairy farmers in 2015,
overall exports for the industry declined from 16% of production
to 14%. Some economists expect our dollar’s strength to
continue. Consequently, the dairy experts project a drop of
$.60/100 #’s of milk for Class III milk in 2016.
Corn and Soybeans - On the production front, both of
these grains had strong years in 2015. For corn, we had very
good yields, resulting in record production. However, demand for
our corn is down. Consequently, we have the highest carry-over
of corn on record. Again, we need to export!
A potential bright spot for corn is the increasing demand for
feed for our livestock and poultry. The corn price at harvest in
2016 is projected to be $3.60/bushel, possibly as low as
$2.91/bushel. The cost of production for corn last year is
estimated at $4.43/bushel.
Soybeans have a similar story. We had record soybean production
in 2015. We also have record soybean carryover. And our
competitors? Brazil also had record production. Consequently,
the 2016 harvest price is going to be down, and could be as low
as $7.46-$8.50/bushel. The cost of production for soybeans is
Beef – I am proud that the largest beef producing
counties in Wisconsin are located in the 17th Senate District.
The beef herd continues to grow. While the outlook for beef is
generally positive, beef competes with other protein options
such as pork and poultry. Like so many of our foods, domestic
beef demand will largely depend on the economic strength of
Hogs - Our hog numbers are increasing. Production costs
are decreasing. There will be an abundance of pork, which will
limit any upward price movement.
Strategies for 2016
Based on the information shared at the Forum, farmers will be
challenged to focus on cutting costs and marketing to overcome
economic obstacles in 2016.
Cutting Costs - In order to cut costs, farms will seek
ways to manage resources, repair rather than replace and
negotiate for better prices. One of the main ways recommended by
the Forum to control costs is to renegotiate rent prices for the
land we farm. Farmland rentals increased 8.34% per year between
2007-2014. This major increase must even out or turn the other
direction if our farmers are to overcome the economics we are
Marketing - Farmers are innovative. Farmers are
survivors. We need to find new marketing opportunities for our
agricultural production. What worked in the past may not work as
well in this competitive landscape.
Overall, farmers are eternal optimists. They are in the business
for the long haul. They understand the business cycles of
agriculture and know how to manage in good times and bad.
I am proud to represent the 17th Senate District, which has more
agriculture than any other senate district in Wisconsin. The
strength of our agricultural community is vital to the strength
of our small rural communities. The next time you see a farmer,
say “thank you”!
Again, the Ag Economic Outlook Forum is a deep dive into
agricultural economics. While some of the news is frustrating,
the analysts encouraged Wisconsin farmers to be creative and
strategic as they plan for the next year. I am confident that
the farmers in the 17th Senate District will persist in 2016.
The Legislature is nearing the end of the
2015-2016 Legislative Session. We expect to be finished
with active session days by mid-March. As a result, the pace of
bill introductions, hearings and overall legislative activity
has increased exponentially.
One of the tools we use to track our bills and
to keep an eye on specific pieces of legislation is the
Legislative Notification Service. This is a free,
public-access tool that allows you to create an account and
track specific bills by number or bills that contain specific
keywords. Each evening, the service generates an email to you
with updates related to the terms you set up in your account.
The notifications include information about
public hearings, executive sessions, votes, amendments,
co-sponsors and more. It is a great way to stay up-to-date on
If you have interest in a specific bill or would
like to know more about legislation related to a specific topic,
I encourage you to sign-up for an account and start tracking
Click Here to access the Legislative Notification Service.
In The 17th Senate District
Rep. Ed Brooks
(R-Reedsburg), Joe Hasler, and Sen. Howard Marklein promote
items at the Annual Reedsburg United Fund Radio Auction on
Monday, January 25, 2016 at the VFW Hall in Reedsburg. The
auction runs through Friday, January 29th and can be heard on
1400 AM and viewed on Channel 12 in Reedsburg via RUCLS
Rob Taylor, Principal of Reedsburg High
School, welcomed Sen. Howard Marklein for lunch on Monday,
January 25, 2016. Sen. Marklein enjoyed the school lunch and
visiting with Mr. Taylor while observing the "White Out" and
"Summer Day" outfits for Winter Carnival Week at RHS.
Revenue Collections: December 2015 (Fiscal
The Wisconsin Department of Revenue (DOR) recently released a
report detailing general purpose revenue (GPR) taxes collected
by the agency for the month of December.
The following table shows the GPR collections to date as of
December 31, 2015.
Department of Revenue Collections
December 2015 (FY 2016)
|General Sales & Use
Department of Revenue