MILWAUKEE (AP) — Wisconsin farmers earned an estimated $3.75 billion last year, their second most profitable ever, thanks in large part to strong dairy and livestock sales, University of Wisconsin economists reported Wednesday.
Farm profit was $550 million more than in 2012 and close to the record $3.8 billion earned in 2011, according to the Status of Wisconsin Agriculture, 2014.
Much of the boost came from a record $5.6 billion in dairy sales, which were helped by high milk prices and an increase in production. The report's authors warned that farmers were likely to see less revenue this year as milk prices drop with increased production in the U.S., Europe and New Zealand.
Still, Wisconsin's farms are in good shape, according to the annual report produced by UW-Madison and UW-Extension.
"We've had three years in a row of very attractive net farm incomes," Ed Jesse, a University of Wisconsin-Madison agricultural economist and co-author of the report, said in a statement.
The value of farmland and other assets has been increasing, while farm debt declined 7 percent last year.
Dairy sales totaled about $400 million more in 2013 than in 2012 and 2011, when they were roughly the same. The report did not provide an estimate of dairy profits, which are sales minus costs.
However, dairy farmers who graze their animals or grow their own feed likely did better than farmers who buy feed, as prices for forage remained high following the 2012 drought, the report said. Wisconsin dairy farmers, in general, are more likely to raise their own feed than those in western states.
Wisconsin milk production increased to 27.7 billion pounds last year, a 1.7 percent increase from 2012.
A special section of the report detailed the turnaround in Wisconsin's dairy industry, which lost farms and cows during the late 1980s and 1990s.
The state's dairy herd bottomed out in 2005 at about 1.2 million cows. Less than 40,000 cows have been added since then, but the report emphasized that stability in numbers was a significant improvement from the losses seen in previous decades.
It noted that profitability in the dairy industry has come from changes in animal care, feed and housing that increased productivity. Each cow in Wisconsin produces more milk than it would have five or 10 years ago.
Wisconsin's other livestock farmers also did well in 2013. Sales of meat animals, such as grass-fed beef, grew 2 percent to $1.45 billion, while poultry and egg sales increased 7 percent to $500 million. Sales of other livestock, such as dairy goats, also grew 7 percent to $430 million.
The value of Wisconsin's corn crop dropped nearly $200 million in 2013, after farmers reaped high prices on a smaller supply during the 2012 drought. Feed crop sales, which are mostly corn, totaled $2.1 billion last year.
Wisconsin vegetable growers saw a more than 25 percent increase in sales, from just over $370 million in 2012 to $470 million last year. Potatoes, snap beans and sweet corn are among the state's top vegetable crops. Sweet corn consumption has been increasing as processors shift from canning to freezing corn.