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Weathering the storm: Difficult growing season, dairy farm losses named top stories from 2019

From weather that made both planting and harvesting a challenge to the loss of more than 700 dairy farms in Wisconsin and political bickering that cost the state agriculture secretary-designee his position, 2019 was a difficult year in the agriculture industry.

The challenging conditions caused by the weather landed that story in the top spot on The Country Today’s annual Top 10 story list for 2019. The list was formulated through a vote by The Country Today editorial staff members on a list of 13 contenders. Staff aimed to determine the 10 most important or impactful stories to readers over the past year.

Following is the final Top 10 list for 2019, as developed by The Country Today editorial staff:

Weather

From beginning to end, the weather made it difficult for farmers to catch a break this year. Heavy snows caused numerous roof collapses on farm buildings early in the year; then wet ground made it difficult, and in some cases impossible, to get into fields for planting, and by harvest season, more rains made it difficult for farmers to find a good-weather window to get anything done and early snows stranded many crops in the fields.

The 2019 planting season opened with already heavily saturated soils, according to the 2019 Crop Progress Review from the U.S. Department of Agriculture’s Wisconsin Ag Statistics Service. Below normal temperatures and frequent rain events kept soils wet throughout the cropping season, causing significant delays to fieldwork. Overwintered crops were damaged by ice storms in January and February, followed by spring flooding and multiple freeze-thaw cycles in March, April and May. Late snow and cold soil conditions in April and May delayed planting significantly and suppressed crop emergence and pasture growth.

Deep mud and high grain moistures delayed the start of fall fieldwork, and remained major problems throughout the rest of the year. A Halloween snowstorm dumped up to 8 inches of snow across southern Wisconsin. Below average temperatures in early November helped firm the ground, improving access to muddy fields but stalling fall tillage. Frequent snow and rain in November kept grain moistures high, prompting some farmers to delay harvest even further. Delays to the harvest in turn delayed or prevented fall tillage, plantings and manure spreading, resulting in the slowest fall tillage progress in the past 40 years of Crop Progress data, Wisconsin Ag Statistics Service’s report said.

Dairy losses

Dairy farmers continued to struggle in 2019, not only in Wisconsin, but across the United States. In 1970, the U.S. boasted 640,000 dairy farms, but today, there are less than 40,000 licensed American dairy farms.

As of Dec. 1, Wisconsin had lost 826 dairy farms in 2019, surpassing last year’s record-high loss of 691 dairy farms in the state. According to the final USDA’s National Agricultural Statistics Service Wisconsin Field Office, Wisconsin was home to a total of 7,337 dairy farms — a far cry from the approximately 13,500 dairy farms recorded in Wisconsin just 10 years ago in 2009.

At a dairy-centered meeting in early November, UW-Madison professor emeritus Bob Cropp predicted better milk prices in 2020 due to a number of factors, including no big jumps in milk production; a slowing increase in milk per cow; modest growth in domestic demand; a higher number of dairy exports; and a signed trade agreement with Mexico and Canada.

But even with better milk prices in 2020, experts have also said there will be lingering effects in Wisconsin’s dairy industry after several years of turmoil.

DATCP secretary nominee rejected

On Nov. 4, the Republican-controlled Wisconsin State Senate broke decades of precedent and voted 19-14 along party lines to reject Brad Pfaff as the nominee to head the Department of Agriculture, Trade and Consumer Protection.

Pfaff clashed with Republican senators during his time as secretary-designee.

Each of five Republican members who were among a unanimous committee vote in February to approve Pfaff changed their votes in November, despite numerous letters from agriculture groups urging the Senate to approve him.

Deputy Secretary Randy Romanski was named interim DATCP secretary a few days later. Pfaff got a new job in Gov. Tony Evers’ administration as the director of business and rural development for the state’s Department of Administration about a week after the rejection vote.

Farm Technology Days

Following a disappointing turnout at this year’s Wisconsin Farm Technology Days, held at Walter Grain Farms in Jefferson County in July, organizers in early October announced they were canceling the 2021 Wisconsin Farm Technology Days, which was set to be held at Jefferson County Fair Park in Jefferson County.

“After more than 60 years of on-farm shows, (Wisconsin Farm Technology Days, Inc., state board) felt the combination of a slow agricultural economy, coupled with a non-traditional off-farm site, would not have the level of appeal to attract the large numbers of attendees needed for a successful show,” Wisconsin Farm Technology Days General Manager Matt Glewen said of the decision to cancel the event in 2021.

The 2020 Wisconsin Farm Technology Days in Eau Claire County is set for July 21-23, at Huntsinger Farms, a horseradish farm. The farm’s subsidiary, Silver Spring Foods, Inc., is the largest producer of horseradish in the world. The show will also offer the opportunity to tour Nellie’s Holsteins in 2020, a neighboring 200-cow dairy farm operated by the Nelson family.

After the year off in 2021, Wisconsin Farm Technology Days will return to Clark County July 12-14, 2022, at Roehl Acres, a 500-cow dairy farm near Loyal.

Farmer mental health

Hard times in the agriculture industry aren’t just taking a toll on farmers financially. The accumulating stressors they face have increasingly drawn attention to their mental health as well.

Then DATCP Secretary Designee Brad Pfaff sparred in July with Republican legislators for the release of mental health funding for farmers. In September, $200,000 in funding was released for the biennium by the Legislature’s budget committee for services including counseling vouchers and mental health-related workshops.

Throughout the state, organizations have been stepping up to address the mental health crisis, offering QPR trainings, running crisis lines, raising funds and working with whatever capability they may have to lend their support to farmers in need.

Trade

Trade remained in the spotlight in 2019, with the year ending on a positive note with the U.S. House of Representatives passing the United States-Mexico-Canada Agreement, also known as USMCA. Many applauded the passage of USMCA in the House as it has been seen as an important step forward in providing market stability for agricultural producers and those in the manufacturing industry.

“It’s good to see progress being made on this agreement. Wisconsin farmers have endured more than their fair share of challenges in the past several years, from low commodity prices to harsh weather. Trade uncertainty has had a significant impact on farmers’ bottom line as well,” said Randy Romanski, interim Secretary of the Wisconsin Department of Agriculture, Trade and Consumer Protection. “I’m optimistic that the approval of USMCA by the Senate (in 2020) will provide some of the certainty and stability our agricultural businesses need and deserve.”

However, tariffs imposed by President Donald Trump earlier in the year left a sour taste in the mouths of many, especially those who lost sales in China due to retaliatory tariffs. President Trump tried to appease U.S. farmers with a $16 billion bailout package for those impacted by the China trade war, but farmers in the South were greater beneficiaries of the funds than those in the northern U.S. states, while others saw the support as not a long-term solution.

The long wait for movement on trade agreements also irritated farmers and those dependent on exports in 2019.

ATCP51

In 2019, staff at the Wisconsin Department of Agriculture, Trade and Consumer Protection were directed to review ATCP51 after four years had passed since the last technical review of the rule, which regulates the local government approval of new or expanding livestock facilities in Wisconsin.

Twelve public hearings were held around the state to solicit public comment, with more than 380 people attending those meetings and hundreds more submitting comments to DATCP via mail and online. After the hearings concluded in mid-September, staff dissected the information gathered and presented revisions to the rule to the DATCP board at the end of October.

Proposed changes to the rule didn’t come without controversy as several agricultural groups from around the state voiced their displeasure with the rule and its revisions, eventually leading to DATCP tabling the rules; the DATCP board is expected to let the scope statement for the rule expire in February 2020.

The state’s livestock siting rule was adopted in 2006 and has never been changed, even after reviews in 2010 and 2014. As of their December meeting, the DATCP board has no immediate plans to revisit the rule.

Hemp interest

The Wisconsin Department of Agriculture, Trade and Consumer Protection saw a six-fold increase in the amount of farmers registered to grow industrial hemp in the second year of the state’s pilot program that established rules for growing the crop that was legalized with the passing of ATCP 22 in 2017.

About 5,000 acres of hemp were planted this year in both fields and greenhouses throughout the state, up significantly from the first year of the program, according to Sara Walling, DATCP’s Division of Agricultural Resource Management administrator.

But the crop does not come without risks. There is no established market for the crop that comes with a high cost to establish, grow, harvest, and convert the into a marketable product.

Also, under current law, growers must destroy their crop at any location where samples test above the 0.3% THC threshold. Of approximately 2,200 hemp samples taken this year, about 13% of the samples resulted in crop destruction.

Dairy 2.0/Dairy Hub

While the Dairy Task Force 2.0 met for the first time in 2018, their work continued into 2019, culminating with the release of their final report in June. Dr. Mark Stephenson, Dairy Task Force 2.0 Chair and director of Dairy Policy Analysis at UW-Madison, compiled the 51-page report, which included 51 recommendations and information on milk production, milk price volatility and changing farm structure across the country.

“While the group’s work has completed, it is now time for all of us to consider how these recommendations could be implemented to maintain Wisconsin’s world leadership in dairy,” Governor Tony Evers said in July after the final report was submitted to him.

The top three recommendations detailed in the report included investing in the Dairy Innovation Hub; support for a feasibility study for the Wisconsin Cheese Brand and Export Board; and support for a staffing analysis at the Center for Dairy Research and additional state funds for full-time positions there. Other recommendations highlighted the need for additional investments in research, increased innovation, expanded market development and strengthened connections across the industry.

In November, one recommendation in particular took a step forward as the Dairy Innovation Hub officially launched at UW-Madison, UW-Platteville and UW-River Falls. Funding was included in the state’s 2019-2021 biennial budget after legislation was introduced in May to support the hub, with $1 million dedicated for the first year and $7.8 million per year in subsequent years.

“Wisconsin is already recognized as a dairy superpower, and this is a reinvestment to reprioritize dairy innovation,” said Dr. Wayne Weber, dean of the College of Business, Industry, Life Science and Agriculture at UW-Platteville. “This will increase the capacity to help the farmers meet the challenges of today and tomorrow.

“There are huge amounts of opportunities here to positively impact the farms of southwest Wisconsin and in turn, have an impact statewide, nationally and globally.”

Year of Clean Water

Gov. Tony Evers declared 2019 to be “the year of clean drinking water,” drawing attention to water quality issues across the state and widening the search for answers and solutions.

Private well contamination in the state, specifically the rural areas, is hitting headlines, and the Southwest Wisconsin Groundwater and Geology study continues to work to identify sources of contamination. Agriculture, while not solely to blame for problems, continues to contribute nitrate and livestock fecal matter into the contamination equation.

Many farmers, however, are leading the charge to adopt practices, such as reduced tillage and cover cropping, to combat nearby water contamination. Farmer-led watershed groups received $750,000 in Wisconsin’s latest round of Producer-Led Watershed Protection Grants, which will allow more progress on conservation issues.


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Basse: U.S. dairy markets set to improve in 2020

Those who follow Dan Basse, president of Ag Resource Company of Chicago, know that he hasn’t been all that optimistic about U.S. dairy in recent years. In fact, Basse himself admitted that since about 2015 until about the beginning of 2019, he had been very pessimistic when it came to dairy’s outlook.

However, Basse thinks things may be turning around, with data suggesting a relatively good year ahead in 2020.

“It was a relatively good year (in 2019),” Basse said during a Professional Dairy Producers of Wisconsin webinar on Dec. 18. “I think the dairy industry has seen some recovery and now we’ve got some things on the counter in terms of trade deals and opportunities for the year ahead.”

Basse sees several themes emerging in the dairy market in 2020, including the expansion of U.S. cheese exports after a recovery was recorded in 2019 for domestic and export cheese demand. He also predicted that U.S. feed prices should stay lower or even fall farther following a December/January corrective recovery, and recommended those looking to cull animals to do so in the first quarter of 2020 when prices are expected to be best.

But with opportunities in feed and pricing in 2020, those in the dairy industry will still have to manage political risk on top of price risk this year. It is an election year in the U.S., and trade deals, especially the United States-Mexico-Canada Agreement, the U.S.-China agreement and an agreement between the U.S. and European Union, are on the front of mind for many in the agriculture industry.

U.S. and China have agreed to Phase 1 of their deal “in principle,” Basse said, meaning the deal is still being translated and exact verbiage is being recorded, with the two presidents working to make this deal. Basse hopes the first phase of this trade deal will be inked in mid-January, allowing a 30- to 45-day window for the Chinese to ramp up their purchases of U.S. agricultural goods, including dairy and cheese but also pork and soy, which is what they need most right now after their struggles with African Swine Fever in 2019.

Tariffs are still in place, including tariffs on U.S. dairy and red meats into Mexico, Canada and China. And while the U.S. House of Representatives recently approved USMCA, Basse warned that other trade deals could easily be undone if there is a change of presidency at the end of 2020.

“We need to see (the tariffs) come down and again remember that these trade deals, outside of USMCA, are just the strike of a pen away from unraveling everything,” he said.

While trade talks may be a bit unpredictable, Basse is willing to say that the days of sub $15 milk have passed; however, rallying values about $20 (per hundredweight) could be difficult with China’s import demand. Basse added that $16 (per hundredweight) should serve as the bottom in 2020, and will come in the first quarter of the year.

In summary, Basse said we’ll need to watch as these three variables impact U.S. dairy markets in 2020: politics, economics and weather.

Basse hopes the trend of exiting farms will stabilize in 2020 after another year of sharp declines in farm operations. One trend won’t be going away though, Basse predicts, and that’s the consolidation and growth to larger farms. Basse said this trend may even accelerate in the years to come.

“We believe it’s related to management practices and your abilities to navigate the markets,” he said. “If you can get those two things right, we think there’s opportunity to expand as your neighbor decides to step aside.”

Farm land prices have been flat for the last three and a half years, with Basse not seeing much movement in prices into the future either as there are no incentives to go out and buy farmland. Farm stress and farm debts remain at all times highs, and will continue to be watched in 2020 as Basse worries balance sheets may be stretched more and more.

“We’ll have to look at our cost structure very carefully in the year ahead and keep trying to find measures to make some adjustments to the downside,” he added.

In the world market, Basse is keeping his eye on Africa, Egypt, Pakistan and India; it’s “where agriculture is spending all of its time right now,” he said. There are also opportunities in southeast Asia where trade can be expanded and caloric consumption can be increased.

Basse predicts his company will be focusing on this part of the world for the next 20 years, and urges others in agriculture to look to this part of the world as well.

Overall, Basse is optimistic, with a prediction that the U.S. dairy market is “set to improve” in 2020, but cautioned how important trade deals will be in the new year.

“All of this inspires hope for the U.S. dairy market in the future,” he said.