UWM’s Department of Agricultural and Applied Economics conducts this research every five years and compiles a report, The Contribution of Agriculture to the Wisconsin Economy. Its most recent data comes from 2017.
They found the Wisconsin agriculture industry generated $104.8bn in revenue that year, up from $88.3bn in 2012. It also supported 437,700 jobs, an increase of about 24,000 jobs from 2012.
Maintaining and growing rural areas
Dairy specifically was responsible for about half the agriculture revenue at $45.6bn, and 16.4% of the state’s total. Producing dairy milk supported 154,000 jobs in Wisconsin and generated $1.26bn in state and local taxes.
Professor Steven Deller, of UWM, said, “It is clear that agriculture – and particularly dairy – plays a critical role in Wisconsin’s economy. To put this in perspective, dairy’s economic impact is twice that of another key growing industry, Wisconsin tourism. It also shows dairy is Wisconsin’s signature industry and is central to our state’s identity.”
The report pointed out that dairy far outstrips other states in terms of important local goods. The $45.bn it contributes to the Wisconsin economy is greater than citrus’ $7.2bn in Florida and potatoes’ $2.7bn in Idaho.
Though the increases from 2012 can be partly attributed to inflation in the period (6.7%), agriculture industry sales increased by 15.7% and labor income was up 17.2%, indicating further growth.
Chad Vincent, CEO of the Dairy Farmers of Wisconsin, said, “This report reflects the importance of cheese and dairy in our state and is why we are America’s Dairyland. To me, the deeper importance is the impact dairy farming and processing has on maintaining and growing our rural areas.”
“The economic impact derived from agriculture in our state cannot be underestimated. Statewide dairy helps support a strong future for Wisconsin with job creation and tax revenue that goes toward better roads, new schools and a variety of other public services.”
Balancing two sides of the same coin
Some of Wisconsin’s agriculture growth is stemming from trade. According to the report, Wisconsin exported more than $2.5bn in agriculture products, including $451m worth of dairy products.
Because today’s consumers are also more health-conscious and keen on high-protein diets, Wisconsin believes that supporting the demand for its dairy products beyond its borders is key to the future of the state’s dairy industry.
According to the report, 90% of Wisconsin milk is used in cheesemaking, with the rest divided between butter, ice cream and cultured products like yogurt, cottage cheese and kefir. Wisconsin has a 48% share of the specialty cheese category in the US.
The report concluded on-farm activity was not a major contributor to the increases that Wisconsin dairy saw between 2012-2017, but is likely a reflection of weak commodity prices in 2017. Dairy processing had an overall greater impact on the economy than farm activity.
“The challenge facing Wisconsin agriculture is that on-farm activity and food processing are ‘two sides to the same coin’ and as one does better the other does better,” the report said.
“The continued weak net farm income, a pattern that Wisconsin farmers have not experienced since the farm crisis of the early 1980s, may put the food processing industry at risk.”
Source: Dairy Reporter