Status of Wisconsin Agriculture 2010 - Agricultural & Applied ...

More documents

Recommendations

Info

The Importance of International Trade to Wisconsin Agriculture5 Ed Jesse and Steven Deller6 Introduction Any discussion of what should be done to help Wisconsin farmers recover from the current economic downturn should consider that an increasingly large share of the state’s dairy and other agricultural products are being sold outside of the United States. As noted in other parts of this report, the global economic collapse that began in late 2008 sharply reduced agricultural trade. The large drop in export revenue caused much of the fall-off in U.S. and Wisconsin net farm income in 2009. That means that restoring U.S. farm profitability will require economic recovery in emerging economies that represent rapidly growing markets for U.S. farm products, as well as in 120 the United States itself. 100 In this section, we review the growing importance of international trade 80 to U.S. and Wisconsin agriculture. We also assess the “multiplier 60 effect”—the ricocheting impact of Wisconsin agricultural exports 40 across the state’s economy. In considering this analysis, keep in mind 20 that in 2008 the nation and Wisconsin had record large agricultural 0 exports, meaning that the economic impacts calculated for that year are larger than those generated in 2009 and perhaps in 2010. U.S. Agricultural Exports Farmers in the United States have become increasingly reliant on foreign sales as a source of income. U.S. agricultural exports topped $40 billion in 1981, reached $60 billion in 1996, and hit a record $115 billion in 2008. The value of U.S. agricultural exports has grown at a faster rate than the value (to farmers) of U.S. crop and livestock production. Exports are now a leading indicator of farm income. Increases in exports boost farmers’ cash receipts in the same year or the following one, while decreases in exports pull 36 STATUS OF WISCONSIN AGRICULTURE 2010—FRAMING THE FINANCIAL CRISIS $Billion Index, 1982-84=100 350 300 250 200 150 100 50 0 receipts down. 7 This effect is especially pronounced in 2008 and 2009. The record cash receipts enjoyed by U.S. farmers in 2008 were due in large part to record U.S. agricultural exports, while the large decline in cash receipts in 2009 can be directly attributed to an unprecedented fall-off in the value of exports. Foreign sales are particularly important for U.S. grain, oilseed and cotton producers. The nation exported more than half of its wheat, rice and cotton harvest in 2007-08 as well as 43 percent of its soybeans. And while we *2009 is Forecast and 2010 in Projected Source: ERS, USDA 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010* *2009 values are projected Source: ERS, USDA Value of U.S. Agricultural Exports Fiscal Year (Oct-Sep) U.S. Farm Cash Receipts and Agricultural Exports* Cash Receipts Ag Exports 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2008 Calendar Year
Major U.S. Export Crops, 2007-08 Crop Years U.S. U.S. Share of U.S. U.S. Share of Commodity Production Exports Crop Exported World Exports World Exports Mil. MT Percent Mil. MT Percent Corn 331.2 61.9 18.7% 98.61 62.8% Soybeans 72.9 31.5 43.3% 79.52 39.7% Wheat 55.8 34.4 61.6% 117.20 29.3% Rice 6.3 3.4 52.8% 31.09 10.8% Cotton 4.2 3.0 71.4% 8.35 35.9% Source: USDA. World Agricultural Supply and Demand Estimates, October 2009 exported less than 20 percent of our corn, the United States had a larger share of the global market for corn— 63 percent of total world exports—than for any other major U.S. grain crop. Three crops—soybeans, corn and wheat—accounted for more than 45 percent of U.S. agricultural export value in 2008. Animal products (live animals and meat, poultry products and dairy products) added another 16 percent, fruit and vegetable products represented about 10 percent and cotton comprised 4 percent, while the remaining 25 percent came from a long list of products. The importance of agricultural exports to a given state depends on the mix of commodities produced in that state. California was the leading agricultural exporter in 2008, because much of its large production of fruits, vegetables, tree nuts, rice and cotton was sold overseas. Several Corn Belt and Great Plains states follow, due to their feed grain, wheat and oilseed production. Wisconsin ranked 15th, with a total agricultural export value of $3 Ubillion. Dairy Prods 4,099 Cotton 4,782 All Other 28,792 Poultry & Prods 4,922 Vegetables & Preps 5,160 Fruit & Preps 5,926 Live Animals & Meat 9,455 Soybeans & Prods 19,332 Feed Grains 18,148 Wheat & Prods 14,836 Values in $Million Total: $115.5 Billion Source: ERS, USDA Wisconsin Agricultural Exports Wisconsin’s export mix differs significantly from that of the nation, reflecting the unique nature of Wisconsin agriculture. Not surprisingly, dairy products—primarily cheese and whey products—accounted for nearly a third of total Wisconsin export value in 2008. Next came feed grains (mainly corn), soybeans, live animals and meat, and vegetables. Together, these commodity groups represented 75 percent of Wisconsin’s export value. Wisconsin led the nation in dairy exports in 2008, accounting for nearly one-fourth of the nation’s total of $4.1 billion. California, which dominates in exports of nonfat dry milk, was in second place, followed by New York. Exports from these three states represented more than half of the total value of U.S. dairy exports. Wisconsin also ranked among the top ten in exports of vegetables (6th), hides and skins (4th) and animal fats (5th). U.S. Exports of Agricultural Products, FY 2008 U.S. Agricultural Exports by State, FY 2008 U All Other States 36.5 WI 3.0 SD 3.0 NC 3.1 WA 3.2 AR 3.2 MO 3.2 CA 13.7 IA 7.9 KS 5.9 IL 7.5 TX 6.0 NB 5.9 MN 5.5 IN 3.8 ND 3.9 Values in $Billion Total: $115.5 Billion Source: ERS, USDA STATUS OF WISCONSIN AGRICULTURE 2010—FRAMING THE FINANCIAL CRISIS 37
Page 1 and 2: S TAT U S O F Wisconsin Agriculture
Page 3 and 4: Preface Status of Wisconsin Agricul
Page 5 and 6: export markets, which left more mil
Page 7 and 8: Wisconsin Farm Income After two con
Page 9 and 10: $Billion 70 60 50 40 30 20 10 Asset
Page 11 and 12: Percent 40 36 32 28 24 20 16 12 8 4
Page 13 and 14: The General Economy and Agricultura
Page 15 and 16: Allocation of Funds from the Fiscal
Page 17 and 18: ments and expand hiring until they
Page 19 and 20: 2009 in light of the global recessi
Page 21 and 22: What farmers pay for fertilizer and
Page 23 and 24: Dairy Bob Cropp (262-9483) Review o
Page 25 and 26: mated at 189.2 billion pounds, down
Page 27 and 28: may do better. As of October 2009,
Page 29 and 30: The main pressures on the supply si
Page 31 and 32: Corn and Soybeans Randy Fortenbery
Page 33 and 34: Beginning stocks (stocks as of Sept
Page 35 and 36: Fruits and Vegetables A.J. Bussan*
Page 37 and 38: Introduction III. Framing the Finan
Page 39 and 40: price could not cover estimated fee
Page 41: orders (FMMOs), the Upper Midwest o
Page 45 and 46: Economic Impact of Wisconsin Agricu
Page 47 and 48: impact experienced by producers who
Page 49 and 50: Lenders are very nervous about the
Page 51 and 52: farmers and other industry particip
Page 53 and 54: dairy products, and perhaps one of
Page 55 and 56: 7. Foreign Tax Credit Carryovers. A

Status of Wisconsin Agriculture 2010 - Agricultural & Applied ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?