Eight Wisconsin ag groups ask Governor for direct payments from CARE Act funding
Eight Wisconsin agriculture groups have asked Governor Tony Evers to direct 50-million federal CARE Act dollars to direct farmer payments.
Joe Bragger is the President of Wisconsin Farm Bureau. He tells Brownfield, “What we’ve pledged to do is to work with the Governor and work with our Department of Ag, Trade, and Consumer Protection and really provide some numbers to spell out how bad it is for the farmers out here and the economic losses that we’ve experienced.”
Bragger says they’ve provided the Governor with the numbers from each Wisconsin ag sector to show him the need for direct payments. “To really help to show, again, the losses agriculture is experiencing and we don’t want agriculture and our farmers left out of this.”
And, Bragger says the direct payments are needed now. “This is the most expensive time of year for a farmer as we skate into planting, so we’ve got to make sure they’re able to do that.”
The federal coronavirus relief package known as the CARES Act designated 1.9 billion dollars to help Wisconsin’s economy.
In the letter to Governor Evers, the groups say they’ve never experienced the type of crushing economic destruction that this pandemic has brought across commodity markets, devastating the labor force, threatening supply chains, and creating panic buying from retailers and consumers. The groups pleaded for him to consider the plight that has come upon Wisconsin’s premier industry through no fault of its own, saying food production cannot start and stop on a dime, the investment is too great, and they fear some of these agricultural losses will be permanent.
The Wisconsin Farm Bureau, Wisconsin Corn Growers Association, Dairy Business Association, Wisconsin Soybean Association, Wisconsin Pork Association, Wisconsin Cattlemen’s Association, Wisconsin State Cranberry Growers Association, and the Wisconsin Potato and Vegetable Growers Association sent the request in a letter to Evers Tuesday. The Wisconsin ag groups say the coronavirus impact on markets and supply chains will likely bankrupt many multi-generation farms.
The following breakdown of the agricultural impact of COVID-19 in Wisconsin was provided by the participating Wisconsin ag organizations:
Dairy: This sector has experienced an 87¢/cwt decline in February 2020 and a $1.74/cwt decline in March 2020. This equates to a $66 million loss in Wisconsin milk revenue for those two months. Going forward, the projected decline estimates approximate losses $6/cwt, which will result in hundreds of millions of dollars in losses. In addition to losses from plummeting prices, many dairy farmers in Wisconsin have been asked to dispose of milk or cut production, which causes even greater difficulties for those farms as they try to stay in business.
Pork: Currently, 10 percent of the U.S. pork processing capacity is closed. Twenty-five percent of the Wisconsin hog market has been lost due to the shuttering of the food service industry. At this time, projected Wisconsin hog production losses (not including processing losses) is $44.4 million.
Beef: The beef industry has been faced with losing 25 percent of its packing capacity in addition to a $25/cwt pullback in cash prices since Feb. 1. In Wisconsin, each segment of the industry faces extreme losses: 310,000 cow-calf operations with a loss of $247.15/head, 250,000 cattle of feed with a loss of $205.96/head, and 340,000 stocker calves with a loss of $159.98/head. This equates to approximately $180-$200 million loss to Wisconsin’s beef industry in 2020.
Potatoes: Approximately, 500,000 cwt of potatoes have been displaced and there has been a 1,119,895 cwt contract reduction for 2020, which equals current immediate estimated losses of $17 million. In addition, the massive reduction in foodservice sales due to coronavirus has resulted in an oversupply situation for the U.S. potato industry that will result in a predicted loss of $100 million for Wisconsin potato growers on their 2020 crop.
Cranberries: Out-of-home consumption of cranberries has declined by more than 60 percent and convenience store sales have declined by 20 percent. Grower prices had just started to rebound from $10-$15 per cwt to ranges in the mid-$20 range. We fully expect declines in the future due to lost sales and export markets. Exports to China, EU and UK have declined by more than $31 million due to retaliatory tariffs. Considering the pandemic, rebuilding these markets will be challenging.
Soybeans: Prices have declined $0.65-$0.75/bushel and costs have increased $0.25-$0.35/bushel equating to projected losses of $1.00/bushel. Wisconsin produces between 80 million and 100 million bushels of soybeans annually. Current projected losses are $80-$100 million.
Corn: As of Mid-April, cash corn prices have declined by 16 percent on average, with several regions experiencing declines of more than 20 percent. Forecasting prices through the rest of the 2019 crop marketing year shows a $50/acre revenue decline for corn compared to a $10/acre drop for soybeans. (Actual revenue losses will depend on how much corn a producer currently has to market.) Wisconsin corn acres in the last 2019 were 2.68 million acres and in 2020 there will be an estimated 8 percent increase. Corn will be one of the most impacted crops as its two largest uses – livestock feed and ethanol – are under pressure. Impacts of reduced livestock demand are just beginning to come to bear in the market, as livestock processing plants are beginning to be disrupted.
Wisconsin Farm Bureau President Joe Bragger discusses letter to Governor Tony Evers requesting 50 million in direct farmer payments