University of Wisconsin ag economists and farm leaders gather each January in Madison to look back at the previous year and look forward to the coming year at the annual Wisconsin Agricultural Outlook Forum. This year’s event was held Jan. 24 at Union South on the UW-Madison campus.
2022 was an excellent crop year in Wisconsin, according to UW-Madison ag economist Paul Mitchell, director of the Renk Agribusiness Institute.
“For the past three years, we have had high crop prices and high yields,” Mitchell said. “You don’t usually see that.”
Mitchell said corn yielded an average of 180 bushels per acre in 2022, which was a record for Wisconsin. Soybean yields were strong, too, at an average of 54 bushels per acre. That is the second-highest average yield in the state’s history.
“So what are farmers doing with all that money?” Mitchell asked. “They are paying down debt.”
Farm income in 2021 was 24% above the 20-year average, and Mitchell said it was 7% higher in 2022 than in 2021.
He said Wisconsin farmland values shot up significantly during the past three years, jumping 10% in 2022 and 21.6% since 2020.
“After two years of high income and increased land values, the average Wisconsin farmer is going into 2023 in a solid position,” he said.
Mitchell also noted that farm bankruptcies in Wisconsin dropped in 2022. There were 10 farm bankruptcies in the state last year, he said, compared to 76 in 2020.
“After leading the nation in farm bankruptcies for the past several years, this is good news,” Mitchell said. “Part of this is due to the Farm Service Agency putting a moratorium on foreclosures, but we also had high prices for corn, soybeans, dairy and beef last year.”
Challenges coming
But Mitchell said farmers are facing some headwinds in 2023.
“The cost of production is up 10% to 20%,” he reported. And with rising farmland values, land rents climbed 9% last year to average $145 per acre.
“Lafayette County has the highest average land rent at $235 per acre,” Mitchell said. “Seven counties in Wisconsin averaged over $200 per acre for land rent in 2022.”
Mitchell acknowledged that farmers are anxious going into 2023, especially with an end to record-low interest rates.