Agriculture has been and continues to be a cyclical business. I have received many questions about the struggles of farming, either from those not involved with agriculture and also those trying to continue farming. How did we get here and how long have we been here? Kevin Bernhardt, UW-Extension and Center for Dairy Profitability Farm Management Specialist, shared in an article strategies for farmers that are “Managing at the Bottom of the Farm Income Cycle.”
The charts in Figures 1 and 2 show “Net Farm Income from Operations” (NFIFO) for crop and dairy farms from 1993 through 2015. There are large dots on high-income years of each cycle with the number of years shown between cycle highs. For 2017 and the first half of 2018, agriculture has been near the bottom of this extended cycle for both commodities.
While farms may prepare themselves for one to two years of a downtown in a commodity, multiple years of low prices in both commodity markets have reduced cash balances for crop and dairy farmers.
Farmers are asking many questions on how to survive tight margins and what to do differently at the bottom of the income cycle. Bernhardt suggests that the answer is the same. The same strategic business management that strives and plans for low cost, high production, sound marketing, good risk management, and continuous sharpening of one’s own saw is the same at the bottom of the cycle as it is at the top. Further, accomplishing those strategies requires information, tools, and analysis that is the same whether at the top or bottom of the cycle.
Extension educators work with individuals and businesses on farm management strategies that could be implemented at any point in the cycle. Reviewing a crop farmer’s production practices with them could result in higher yields that would generate more profits. Reviewing a dairy farmer’s expenses may provide for an opportunity to review what is paid for feed or the land used to produce the feed might be an area for cost savings. These strategies may not assist the farm in the long-run, but it will generate cash to pay bills in tight times.
In periods of tight margins, Bernhardt suggests that the goal for some businesses may be survival until their operation becomes profitable again. There are many options when margins are good to protect the farm business for the next downturn. We just need to get through this cycle first!
Cooperative Extension transitions to UW-Madison
Along with challenges in agriculture, UW-Extension has been facing some transitions. The UW-Extension office in Dunn County is one small piece of the UW System puzzle. Supporting the UW System’s larger mission, educators work alongside the people of Dunn County to improve lives and communities.
Our educators don’t lecture or give grades in a typical classroom. Instead, we deliver education where people live and work – on the farm, in schools and community centers. Cooperative Extension educators also speak to civic groups and county boards, write newspaper columns, do radio and TV programs, facilitate meetings and build coalitions to solve community problems.
Educators in the county office are currently part of UW-Extension’s division of Cooperative Extension. Although last November the Board of Regents adopted a resolution to restructure UW Colleges and UW-Extension. Effective July 1, 2018, Wisconsin Public Radio, Wisconsin Public Television, UW-Extension Cooperative Extension and UW-Extension Conference Centers will be part of UW-Madison.
The full integration to UW-Madison is a complex process that touches everything from hiring and billing to branding and websites. Some items will take much longer than the July 1 transfer deadline and work will continue to be done over the next 12-18 months.
Returning these institutions to the UW-Madison campus presents tremendous opportunities to strengthen existing partnerships and develop new collaborations to address important issues facing our communities. Cooperative Extension’s headquarters was on UW-Madison’s campus for many years and was an important part of the UW’s commitment to the state of Wisconsin. These renewed partnerships will strengthen our ability to serve communities in every county in Wisconsin.
For more information on this transition, please visit https://universityrelations.wisc.edu/extension/.