• Home
  • Education
  • News and Resources
  • Advocacy
  • Associate Members
  • Contact
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu
News
Community, News

Farmers Are Cautious but Optimistic for 2024

Green combine in corn field during harvest

Ag bankers reflect on 2023; prepare for the year ahead

By Hannah Flanders

Agricultural bankers in Wisconsin described 2023 as a year of highs and lows. As expected, it was difficult for Wisconsin farmers to beat the success of the last several years.

In 2021, farmers in Wisconsin were well-positioned for success. Ideal conditions for growing, increased receipts across the board, and lower expenditures than the national average set the stage for record profits in 2022. However, as 2023 unfolded, so too did a number of challenges causing farmers across the state to feel the pressure.

“There were times earlier in the year that I was certainly feeling more like a therapist than a banker,” notes Kevin Konkol, vice president – agricultural/business banking at First State Bank in New London. “However, agriculture runs in cycles. Farmers are aware that every one or two good years are followed by several years of headwinds; that’s where we’re at right now.”

Across the state, ag bankers are still seeing the strength carried over from the last several years, but deterioration is expected into the new year as farmers slowly begin pulling back.

One of the primary challenges that loomed large was the surge in interest rates, which reached over 500 basis points. Though relatively close to the historic average of between 6% and 7%, ag bankers note that many younger-generation farmers are experiencing sticker shock.

“Much of the older generation of farmers have seen rates hit 18% or 19%,” highlights Konkol. “This generation, on the other hand, has never seen prices so high.”

Jenny Jereczek, Security Financial Bank – Durand market president and director of ag banking, notes that while local farmers are cautious but optimistic for the year ahead, how rates will continue into the new year is the question on everyone’s mind. “When the U.S. dollar rises in value, our commodity prices and exports decrease. Coming off several great years, farmers still have relatively strong balance sheets but are seeking new ways to optimize and retain their margins in times of uncertainty.”

It’s up in the air whether current rates are here to stay. . . at least for the foreseeable future. In September 2023, the New York Times reported that Fed officials believed that rate hikes were close to the end and that the economy has seemed to settle into its long-term trajectory.

Whatever the prediction, ag bankers note that commodity prices remain a top concern for many farmers looking ahead.

This year, milk prices dropped from near-record levels to below $14 per hundredweight but have slightly rebounded since the summer. Compared to last year’s average of nearly $7 per bushel of corn, farmers saw prices hovering around the $5 mark.

However, a record-breaking 18% increase in cattle and beef prices from the year prior is expected to offset some of the headache.

“The main concern I’m hearing from farmers is cash flow; they’re all wondering where it will come from,” says Bank of Brodhead’s Assistant Vice President – Ag and Commercial Lending Adam Sommer.

Cody Kirschbaum, vice president – ag relationship manager at Peoples State Bank, Prairie du Chien, elaborates, “As term loans and operating lines of credit come upon renewal, many are experiencing the cost to borrow nearly doubling compared to 2022. This is expected to significantly affect the cash flow of an operation.”

The U.S. Department of Agriculture forecasts that net farm income will decrease by nearly 23% from the year prior. This alarming projection comes just as the cost to borrow increases and production expenses are forecasted to surpass a staggering $458 Billion.

In an effort for Wisconsin farmers to sustain the longevity of their farms, ag bankers each suggest that farmers, in partnership with their lenders, should closely monitor trends in foreign trade and input costs that often dictate U.S. market movements.

“In the last several years, farmers have gotten better at budgeting and understanding how they are able to mitigate risk to retain their margin. By following current events, farmers are able to create a game plan, and with the help of their lender, stick to it. In a volatile market, opportunities — whether it be diversifying or risk mitigations tools — are still available,” notes Jereczek.

However, it is important that producers utilize available resources and tools to help make the best educated decision possible for their specific operation.

“One size doesn’t necessarily fit all, so the playbook may look a bit different from farm to farm depending on the operation,” states Kirschbaum.

Unlike many areas where farmers are experiencing a decrease in returns, experts point out that farmland values throughout the Midwest — including Wisconsin — have remained robust. According to the Federal Reserve Bank of Chicago, farmland values in Wisconsin increased by 8% since 2022, reflecting the strong financial conditions of the past few years.

Of course, being in Wisconsin, weather conditions also played a pivotal role for farmers this year. More than 80% of Wisconsin experienced moderate to severe drought conditions right at the start of the 2023 growing season.

“Farms in the area are doing well considering the spotty rain we encountered this year,” notes Jereczek. “However, final yields for the fall harvest are yet to be determined.”

With the ongoing conflict in Ukraine — a major grain exporter — and the probability of droughts across the U.S. impacting crop yields, lower supplies are expected to impact the availability and cost of feed as well as exports abroad.

Like most sectors, the ag community is also concerned with consolidation, rapid innovation, and generational transitions.

“For many, this last year has really emphasized what variables we should be paying attention to moving forward, alongside the importance of risk mitigation and margin management,” highlights Kirschbaum. “In a quickly evolving economy and society, ag bankers need to be prepared. As trusted advisors and confidants, our role is to help our clients prepare for both the expected and the unexpected.”

The last several years have been a rollercoaster for Wisconsin’s agricultural sector, but experts agree that farmers throughout the state are well-prepared to tackle the uncertainties and opportunities that lie ahead.

“They’re a resilient bunch,” emphasized Sommer.

Print 🖨
November 15, 2023/by Hannah Flanders
Tags: Ag Banking, Agricultural Banking, Agriculture
Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share on Tumblr
  • Share on Vk
  • Share on Reddit
  • Share by Mail
https://www.wisbank.com/wp-content/uploads/2023/02/Farming-scaled.jpeg 1708 2560 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2023-11-15 08:01:292023-11-15 08:01:29Farmers Are Cautious but Optimistic for 2024
You might also like
Classic Red Barn in a Corn Field From the Fields: A Look at REAP
Cows feeding From The Fields: Tools to Assist with Price Risk Management
Committee Chair Spotlight: Get to Know WBA’s 2025–2026 Ag Section Chair Nicholas Felder
Vieau and Endres on Farm Supporting Wisconsin Farmer Resilience Through Challenging Times
Forest trail From the Fields: Fall Transitions
Farm Bill Advocacy
Community State Bank: CSB’s Brian Lois Brings Passion for Farming to Banking
Graduating students throwing graduation caps into air in celebration Two UW Students Awarded Agricultural Banking Scholarships
Search Search

Categories

  • Advocacy
  • Community
  • Compliance
  • Credit Unions
  • Education
  • Member News
  • News
  • Products
  • Resources
  • Uncategorized

Recent Posts

  • SNBT Wraps Up Successful Drive as Part of Power of Community Initiative
  • Unity Bank: Celebrating Our 2025 Bankers of the Year
  • Executive Letter: WBA Advocacy Pays Off as the Trigger Lead Bill and ACRE Advance
  • North Shore Bank New West De Pere Branch to Open June 23
  • One Community Bank Announces 2025 Scholarship Recipients

Archives

  • June 2025
  • May 2025
  • April 2025
  • March 2025
  • February 2025
  • January 2025
  • December 2024
  • November 2024
  • October 2024
  • September 2024
  • August 2024
  • July 2024
  • June 2024
  • May 2024
  • April 2024
  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • December 2020
  • November 2020
  • October 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • May 2019
  • April 2019
  • March 2019
  • November 2018
  • September 2018
  • August 2018
  • June 2018
  • April 2018
  • March 2018
  • January 2018
  • November 2017
  • October 2017
  • September 2017
  • May 2017
  • April 2017
  • December 2016
  • November 2016
  • August 2016
Wisconsin Bankers Association logo
  • About
  • Community
  • Subsidiaries
  • Staff

questions@wisbank.com

608-441-1200

4721 S Biltmore Ln.
Madison, WI 53718

Get our Newsletter!
Subscribe

© 2025 Wisconsin Bankers Association. All rights reserved. | Website Design by Bizzy Bizzy
Link to: Committee Chair Spotlight: Candy Allard Link to: Committee Chair Spotlight: Candy Allard Committee Chair Spotlight: Candy Allard Link to: Bank of Sun Prairie Awarded Cottage Grove’s Best Financial Institution Link to: Bank of Sun Prairie Awarded Cottage Grove’s Best Financial Institution Bank of Sun Prairie Awarded Cottage Grove’s Best Financial Institution
Scroll to top Scroll to top Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

OKLearn more×

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refusing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Privacy Policy

You can read about our cookies and privacy settings in detail on our Privacy Policy Page.

Terms of Use
Accept settingsHide notification only

Subscribe

* indicates required








Membership