Wisconsin continues to lead - in farm bankruptcies. And GOPs have no real answers

The final numbers for 2019 on US farm bankruptcies are in, and it shows the crisis deepened last year.

American farmers have struggled amid U.S. trade talks with both Mexico and China, with soybean exports especially hit hard by retaliatory tariffs by China first imposed in 2018. The hurt in the nation's heartland prompted the White House to set aside $28 billion over the past two years for farmers caught in the crossfire of President Donald Trump's trade war.

Still, despite the billions in farm aid, 595 family farms declared bankruptcy in 2019, up nearly 100 filings from the previous year and the highest count since 2011, according to data from the American Farm Bureau.

Last year's 20% spike lags only the 33% surge seen in 2010, the year after the recession, the bureau found in its search of a decade of bankruptcy data from U.S. courts.

The most recent rise in farm bankruptcies was to be expected, the bureau said in its findings, citing factors including a multi-year downturn in the farm economy, record amounts of farm debt, and headwinds on the trade front.

Farms in Wisconsin generated the highest number of bankruptcy filings last year — 57— followed by Georgia with 41, the bureau reported. Farm bankruptcies were at or above decade-high levels in 10 states: Iowa, Illinois, Kansas, Minnesota, Nebraska, New Hampshire, Ohio, South Carolina, South Dakota and Wisconsin.

You can look at the actual data on Chapter 12 farm bankruptcies here if you want.

We also knew that more than 10% of Wisconsin's dairy farms went out of business in 2018, and new numbers out today indicate that 34 more closed up during January. The decline has leveled off a bit in recent months, but we've still lost more than 2,000 farms since Donald Trump took office in January 2017.

The question is whether this rash of farm bankruptcy and closings in Wisconsin is going to continue. Milk prices jumped more than $5 per hundredweight in 2019, so the revenue picture should look better for the dairy farmers that remain. But that money is likely going to have to be used to pay debts in addition to operating costs, as described in this AP story from Ivan Moreno.

Technology has played an important role in agriculture for years but it's become a life and death matter at dairy farms these days, as low milk prices have ratcheted up pressure on farmers to seek every possible efficiency to avoid joining the thousands of operations that have failed.

“If I use 100 bags of seed on a field and I change the way I distribute the seed, I can yield more without a single extra dollar of input,” said Matt Wichman, Rosendale [Dairy]’s director of agronomy. Such tools “are becoming so economically viable that anybody that’s of a decent scale is adopting these,” Wichman said.

Technology can mean survival, but it involves a perilous gamble: Will the machines produce savings fast enough to cover the debt they incur?

“The last five years have really been treacherous,” said Randy Hallett, who has 85 cows in Casco, Wisconsin, and has spent $33,000 on new milking equipment. He would invest more if his operation could afford it. “I broke even, mostly.”

And those debts aren’t going to be paid off in a year, so if we see another drop in milk prices in the coming months, the squeeze will get worse.

After Governor Evers introduced a package of plans in his recent State of the State address to try to deal with the state's crisis in agriculture, Speaker Robbin’ Vos and the rest of the Assembly Republicans revealed some plans of their own today to try to help the state’s farmers.

Republican lawmakers were vague on some of the specific details in the bills, which Vos said will be unveiled later this week, but he said the overall state investment will be "significantly bigger" than the $8.5 million package of bills proposed by Evers last month in his State of the State address.

“We would probably like to do something that is bigger and bolder than what he first proposed," Vos said. "It would probably cost more money than the $8.5 million because while that is something that is definitely helpful to farmers, it is probably too small an effort to make a substantial difference”

Vos said one of the biggest criticisms of Evers' bills are they are more long term focused, rather than providing quicker solutions. The bills discussed by Republican lawmakers Tuesday could entail a targeted tax credit and health insurance deduction options for farmers.

In other words, it’ll be added giveaways to agribusinesses that already get quite a few tax breaks, and some writeoffs for health care that many farmers are already likely to have. And this tweet confirmed those suspicions of who this WisGOP package will help.

DBA applauds state Republicans’ plans for #agriculture support. #DairyForward https://t.co/6Sv4BqSxIV @SpeakerVos pic.twitter.com/3jFy9VJHan

— Dairy Business Association (@DairyForward) February 4, 2020

The GOP proposals won’t do a thing to combat the real problems hitting Wisconsin farmers – overproduction from Big Ag resulting in lower prices for products, and higher debts resulting from the need to become bigger to stay afloat. It’s an insulting response if you think about it, but Robbin’ Vos always cares about the needs of corporate donors over results, so from that perspective it adds up.

I don’t believe for a second that the trade agreements with Mexico, Canada, or China, will do much of anything to change the problems that Wisconsin farmers are dealing with. And the proposed giveaways by Wisconsin Republicans reiterate the "bigger is better" mentality that has led to bankruptcy for a sizable number of the state's smaller farmers. And until we have policies that break up the hold that Big Ag has on our political system which gives them favorable treatment in today's ag economy, the family farmer will continue to struggle in this state.