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Continuing the conversation
Governor: Rural issues remain a priority, still a lot of work to do

MADISON — Joe Bragger, president of the Wisconsin Farm Bureau Federation, recently had the opportunity to attend Gov. Tony Evers’ State of the State address, complimenting the governor for putting a spotlight on agriculture and rural communities before introducing him at Ag Day at the Capitol on Feb. 4.

“Keeping the conversation going and agriculture in the spotlight gives the rural communities hope,” Bragger said. “(Evers) understands rural people and rural issues; he knows how important our farmers and farms are to rural communities. That’s why in his State of the State address he put so much emphasis on investing in our farmers, agriculture and rural communities.”

In his address, Evers unveiled a three-pronged plan to address agriculture and rural Wisconsin issues, a plan he created after visiting with farmers from across the state to get their feedback and input.

The first prong of the plan included calling a special session in the legislature to discuss eight bills proposed by the governor that addressed items such as providing resources to farmers closer to home through county agents and the Farm Center; creating a new farm-to-fork program that connects farmers and their products to local hospitals, businesses and universities; creating new regional mental health programs for farmers; and support for diversification of farm products.

“Frankly, I don’t care who gets the credit for this — I don’t care at all,” he said. “All I want us to do is to work together and have some good conversations about what’s right for rural Wisconsin.”

The second prong aims to make sure farmers, agriculture industries and rural communities are part of the state’s economic development portfolio. Evers has already called a commission together to work on long-term strategies to invest in agriculture and rural prosperity, but encouraged those in attendance to engage with their lawmakers to keep the conversations going.

“(Economic development) can’t all be around south-southeast Wisconsin,” he said. “It’s got to be a 72-county issue.”

The final prong ties in with the second prong of his plan — working with Wisconsin Economic Development Corporation to establish an Office of Rural Prosperity, which will be a “one stop shop opportunity” for people to navigate the state’s programs and resources.

It will be specifically tailored to residents of rural Wisconsin.

“I know all of this is just scratching the surface, this is not a silver bullet. But I do believe with what we have proposed and what legislators are working on now that we are going to make some meaningful and comprehensive steps towards farmers and our rural communities, and they are crafted with the help of all of you,” Evers said.

He’s also building off accomplishments and progress made in 2019. Significant improvements were made to the state’s industrial hemp program, hopefully poising the state to become a leader in the hemp industry once again. Almost $50 million was invested in broadband services, the largest state investment in state history, Evers said. With the help of the legislature, Evers’ administration was also able to improve the state’s commitment to making bridges and roads safer in Wisconsin. And finally, the state took some critical steps in improving water quality in 2019, which Evers proclaimed the “Year of Clean Drinking Water” at his address last year.

“The important thing about that is that it’s going to take more than one year to deal with (the water quality) issue, but I have the utmost faith in the farm community. They are the original stewards of the land, after the Native Americans, and there’s no reason why we can’t work together to make clean drinking water a priority for the state,” Evers said.

“We still have a lot of work to do, especially for our rural communities that have been hit pretty hard the past four or five years, or longer,” he added. “But farmers have supported our state for generations and our state has survived because of your resilience and your dedication to your work.”

He also commended the work of organizations like Wisconsin Farm Bureau Federation for supporting students’ access to agriculture education through FFA and other agriculture-oriented programs in school districts of all sizes across the state. No matter the size of the district — urban or rural — students in Wisconsin are being exposed to agriculture, and Evers is thankful for that.

WFBF 2020 prioritiesBefore reviewing bills and policies to support on Feb. 4, Bragger asked for a moment of silence for those struggling in agriculture and for those who have succumbed to the struggle in rural areas of our state; he asked that those in attendance reflect on their lives as well as the lives of others and try to think of ways we can continue to support each other.

He knows the legislature and the government is faced with many issues and that agriculture is often misunderstood or passed over when it comes to legislation, but unwaveringly, only the farmer can tell their story.

“With all your heart and soul, tell your story and make that ask,” Bragger said.

Farm Bureau members were asked to support a number of bills and legislation during their visit to the Capitol this year, including revisions to the Wildlife Damage Abatement and Claims Program; Truth in Labeling legislation that addresses labeling for dairy and meat products for public consumption; changes to the Farmland Preservation Program to encourage more participation; funding of eight state specialist positions that have been left vacant due to budgetary restraints; a fix in the MAC crop insurance program; and an exemption for farmer CDL mileage.

Members also heard from six legislators who worked closely with the Speaker’s Water Quality Task Force this past year as they spoke on a panel that afternoon. Included in the discussion were Senator Howard Marklein, R-Spring Green; Senator Patrick Testin, R-Stevens Point; Representative Tony Kurtz, R-Wonewoc; Representative Travis Tranel, R-Cuba City; Representative Todd Novak, R-Dodgeville; and Representative Katrina Shankland, D-Stevens Point. The panel was moderated by Dennis Frame, co-founder of the Discovery Farms program.

Members were then asked to support specific Water Quality Task Force bills, including the creation of a nitrate pilot program for farmers interested in on-farm projects to reduce nitrate; additional funding for county conservationists; an increase in Well Compensation Fund grants; and the creation of a system for buying and selling nitrogen credits through a central clearing house.

An additional bill, which provides a variety of water conservation strategies that include the promotion of cover crops through a partial rebate for crop insurance premiums paid; an increase in funding for producer-led watershed groups; and the addition of a fully-funded managed grazing specialist at the Wisconsin Department of Agriculture, Trade and Consumer Protection, were also asked to be supported.

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Farm financial forecast shows split in net income measures

Farm bankruptcies continue to trend upward and are at a rate of about 3 per 10,000 farms, said Carrie Litkowski, an economist with the United States Department of Agriculture’s Economic Research Service, during the first farm income and financial forecast of 2020.

However, although there are always farmers who may be struggling, Litkowski said, the likelihood of default across the sector remains historically low despite increases since 2013.

In general, trends indicate growing financial stress, as the risk of insolvency is the highest it has been since 2003, Litkowski said.

Net cash farm income is forecast to decrease while net farm income is projected in increase in 2020, Litkowski said.

Net cash farm income is forecast at $109.6 billion in 2020, down 9% from 2019 in nominal (current) dollars (down 10.7% adjusted for inflation). Inflation is forecast at 1.8% in 2020.

Net cash farm income had spiked in 2019 with the selling of crop inventories. The forecast 2020 decrease brings net cash farm income back down close to 2018 levels.

Net farm income, which factors in non-cash items such as depreciation and inventory changes, however, is forecast at $96.7 billion, an increase of 3.3% (1.4% adjusted for inflation).

Adjusted for inflation, the net farm income is projected to be at its highest level since 2014, Litkowski said.

The discrepancy between net cash farm income and net farm income, with one decreasing while the other increases, is “unusual but not unheard of,” Litkowski said.

Overall, farm sector profits are expected to be near average in 2020, Litkowski said.

The forecast addressed the 2 million farms, 951,000-plus farm businesses, and 6 million-plus people living in farm households in the U.S.

Farm businesses — which make up just under half of all farms — include intermediate and commercial farms (operations with the most production, assets and debt).

All types of crop farm businesses are expected to have lower average net cash farm income, after adjusting for inflation, in 2020 after experiencing an increase in 2019.

The outlook for livestock is more mixed, with dairy and hogs projected to lead in growth, while cattle/calves and poultry lag further behind. Overall, an increase is expected, though, Litkowski said.

Total production expenses are expected to increase 3% nominally (1.1% when adjusted for inflation).

Increased expenses include feed and labor expenses as well as higher fuel prices, Litkowski said, while the only notable decrease was interest expenses, which are forecast to fall following lower interest rates.

While other direct payments to farmers from the government are expected to increase, due to a dramatic projected drop in Market Facilitation Program payments — the third tranche of MFP payments recently issued is expected to be the last — total direct payments are forecast to decrease 37%, Litkowski said.

The average net farm income for all farm businesses is expected to be down 9%. However, the Northern Crescent region, which includes Wisconsin, part of Minnesota, Michigan, and much of the Northeast, is expected to decrease slightly less at 6%.

The Fruitful Rim region, largely consisting of southern and western coastal areas, had the smallest decrease at 4%, while the Northern Great Plains at 16% the Mississippi Portal at 17% suffered the largest projected decreases.

As for the well-being of farm-operator households, Litkowski reported a nominal decrease of 0.3% (2.1% adjusted for inflation) in median total household income.

In the 2020 forecast, median farm income was reported as -$1,840; median off-farm income was reported as $68,689; and total median income was reported as $76,590. Because each number is the median, the farm income and off-farm income medians do not add up to the total median, Litkowski said.

This forecast was not adjusted due to the new coronavirus outbreak, Litkowski said, as it was too recent.

Impacts from the Phase 1 trade deal with China on the forecast were limited to whatever impact they may have had on the reports, such as the World Agricultural Supply and Demand Estimates, and other information from analysts that are used to create the forecast, Litkowski said.

The recency of developments like the coronavirus outbreak and the Phase 1 trade deal are why ERS provides three forecasts throughout the year, she said. The next 2020 forecast is scheduled for Sept. 2.

To see more data on U.S. and state-level farm income and wealth statistics, visit tinyurl.com/y6tcj8ep.

top story
No easy fix for road funding problems plaguing southwest Wisconsin

BLANCHARDVILLE — While many in the community of Blanchardville were supporting the girls basketball team at the Pecatonica High School the evening of Jan. 27, about 50 concerned residents in rural Iowa, Green, Dane and Lafayette counties were also gathered at the school, raising their voices for something else they in the community have been passionate about — rural roads funding.

“They call this the Driftless Area but it could be called the ‘Forgotten Area,’” said Mike Berg, a rural Lafayette County resident that organized the recent meeting on rural roads in southwest Wisconsin. “They could call it that because we’ve been forgotten for too long.”

Not only is Berg fed up with the poor condition of his county’s roads and the lack of sufficient available funding to fix them, but he’s also made it his passion to get better access to U.S. Highway 151 from his community, whether that be via State Highway 78 or County Road F.

“Small towns are being forgotten and no one wants to live here if the roads are bad to Madison, where many of the jobs are located,” he said. “Just to have a road to 151 that’s a good road would help.”

Others who attended also shared their concerns with the poor quality roads and lack of funds to fix them locally, expressing their thoughts on everything from safety to declining school enrollments.

“I’m concerned about Lafayette County,” commented Maryellyne Rear, an Argyle resident. “What’s going to happen to our businesses? What are we supposed to do if we don’t have roads that come here?”

“Highway F is an artery that runs through our school district,” said Jill Underly, Pecatonica School District administrator. “This is economically imperative to this region.”

Julie Dochnahl drives County F up to six times a day with her kids; she also serves as an EMT, often times using the road to reach emergencies with her ambulance crew. She said it’s scary when the ambulance meets a school bus, snow plow or semi on the busy but broken-up road as drivers never know if they have enough room to get by.

Her husband, Grant Dochnahl, is also an area firefighter, and expressed his concern.

“It’s a scary stretch of road and the most used thoroughfare to Hollandale,” he said. “I would think anyone serviced by EMS would appreciate timely and safe service.”

Highway commissioners from both Green and Iowa counties shed a bit of light on each county’s funding situation — and just how dire these situations may be.

Green County Highway Commissioner Chris Narveson said he recently went back in his records to see how much state transportation funding came into the county 10 years ago. In 2010, Green County saw $1.6 million more than what is being funded today, even with a $20 wheel tax collected annually on every vehicle registered within the county.

“We’re all in trouble, not just the county but the municipalities,” he said. “We’re in a rural area with declining populations. How do we fund these projects with a negative amount (from the state funding formula)?”

Craig Hardy, Iowa County Highway Commissioner, said his county faces a lot of the same problems as Green County. He also looked back in his records to 2009, a year after he started as highway commissioner, and found the county also received more funding in 2009 than it does today.

Iowa County also has a $20 wheel tax for all registered vehicles, which provides the county with $420,000 annually in revenue. All of that money goes into the county’s bridge repair program, with Hardy adding that most bridge repairs wouldn’t get completed if it wasn’t for the wheel tax dollars as he uses those dollars to match state funds that are available for transportation projects.

John Meyers, Iowa County Board chairman, said County F has a $4.5 million price tag, with the design phase costing $700,000 alone. The County F project first went into the queue for road projects in 2010; in 2015, there was a meeting with Wisconsin DOT and it was thought County F would be slated for construction in four to five years.

Now in 2020, “we don’t know when we’ll fund it,” said Meyers. Iowa County has plans to apply for another transportation grant in 2021, but knows it can’t tackle the project at the county level alone.

“We’re in a squeeze, in a pinch. And the magic bullet, I just don’t see one,” he said. “We’re in a financial hole and an infrastructure hole. We’re literally digging a deficit each year because we aren’t maintaining our infrastructure.”

Meyers added that his service to the county board and his community comes from his desire to leave the county in better shape than he found it — something he feels is getting harder and harder to do.

Wisconsin Department of Transportation Assistant Deputy Secretary Joel Nilsestuen listened attentively while government officials and residents aired their frustrations.

“You’re not the first group to put something like this together,” he said. “It’s a common need we see throughout the state.”

He explained that municipalities from all corners of the state have been applying for state road funding grants and appropriations, adding that a recent round of applications garnered interest from 1,600 county and regional entities. The projects equaled over $1 billion total.

Nilsestuen also commented on Gov. Tony Evers’ desire to raise the state gas tax, which hasn’t been raised in 14 years. The governor’s proposal was shut down by the state legislature, but pieces of it did make it into the biennial budget, including an increase in funding for southwest Wisconsin road projects.

“Obviously it’s still a need. The budget was a first good step but not a cure-all,” he said. “It’s a good amount of revenue going in but I encourage you to keep talking to lawmakers.”

While raising the gas tax has seemed to be an unpopular idea among Wisconsin residents, those gathered at this meeting were in resounding favor of the raising the gas tax, as demonstrated by Iowa County supervisor Mark Storti, who asked those in the crowd to stand if they’d support a gas tax raise.

State Sen. Jon Erpenbach, D-West Point, who was also in attendance, shared his personal support for raising the gas tax. He added that he’s not surprised by what he’d heard that evening.

“I’ll continue to push for the gas tax,” Erpenbach said. “I believe it’s the fairest way to deal with our current situation.”

He added that southeast Wisconsin has gotten a lot of the state’s transportation dollars for a long time, but feels it’s time to give more dollars to local governments to address their own roads, and it’s time to tell legislators there is support to increase the gas tax.

Rep. Sondy Pope, D-Mt. Horeb, encouraged people to keep talking and sharing their thoughts with legislators as well. She said her main takeaway from the meeting will be the almost unanimous support of raising the gas tax.

“At the end of the day, it’ll come down to the gas tax and it’ll take bipartisan support,” Erpenbach said. “There are a ton of County Fs in the state and every county is struggling with this, but we’ll do what we can for F and the roads in our district.”