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Tag Archive for: Agricultural Banking

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Community, Resources

From The Fields: Expect Turbulence

By Nicholas Felder

“Ladies and gentlemen please make sure your seat belt is securely fastened and your seat backs and tray tables are in their full upright position.” As many of us know, these instructions are for the safety and soundness of all those aboard commercial aircraft during what might not be a perfect landing. Well, we might all want to heed that advice and reiterate that to all our customers as soon as possible.

As of the date of this article, the American grain producer is facing $6.60 corn (which oscillated from $4.85 to $7.60 down to $5.65 now $6.60) and $13.94 soybeans (same $12.50, then $15.85, then $12.85, then $14.75, now $13.94) which isn’t all bad! However, all the pilots (and the passengers alike) who are flying across the 2022 crop year aren’t exactly sure where the runway is located and in what condition it stands. As they peer down towards harvest and post-harvest, they must deal with a dense layer of fog comprised of inflation, a strengthening dollar, global unrest, weather, mid-cycle fall elections, and the USDA’s export sales reporting system that went down just as these markets couldn’t get any more volatile. Basis spreads between new and old crops are leading the charge to what looks like a pre-harvest rally. However, the Dow and S&P markets are falling precipitously, leading some experts to believe a demand drag on domestic use is the next big hurdle for the 2022 and 2023 crop marketing cycles. Sell now or later? And, if that wasn’t enough, producers and lenders looking at the 2023 growing/feeding/milking year are facing decisions on things like fertilizer and chemical pricing, even before the ’22 crop really starts to turn away from its summer green. Can we really achieve a “soft landing” of any fashion in this environment? It’s the question both farmers and politicians are struggling to answer.

Change and interruption are inevitable in a global and electronic economy. Too many hands in the pot waiting to grab their “fair share,” while people and animals across the globe fight to find their next meal. However, preparation and a good commodity marketing offense is the best defense for headwinds of the nature noted above. It really all begins with cash flows that are created well before final planting decisions made. Then, regularly updating the living, breathing document as itemized expenses change or planting and crop maintenance is completed so it can be an accurate tool to price whatever commodity being produced. These strategies don’t have to be complex; just planned and emotionless. Nickels saved through discipline and, many times, luck create opportunities to land as softly as anyone is able in today’s environment. A producer can’t farm next year if he doesn’t make it through this year.

We all know that equity may be the key to growth, but liquidity is the key to longevity. As we transition into the autumn harvest season, your fellow banking professionals ask that you be that trusted advisor who is slightly risk averse, but supportive of growth and profitable ventures. There is still money to be made and balance sheets will improve if producers are intentional in their actions and lenders the same. The sky can be prevented from falling if we work together!

Thank you all for your service to the industry, diligence and support of America’s producers, and presence within your local communities. Wishing all a safe harvest season!

Nicholas Felder is vice president, commercial and ag banking, with MidWestOne Bank in Lancaster. Felder currently serves on the WBA Ag Section Board of Directors.

March 13, 2023/by Lori Kalscheuer
https://www.wisbank.com/wp-content/uploads/2022/09/Airplane-Corn-scaled.jpeg 1707 2560 Lori Kalscheuer https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Lori Kalscheuer2023-03-13 13:29:092023-03-13 13:29:09From The Fields: Expect Turbulence
Education, News

Helping Ag Bankers Stay Ahead of Industry Challenges

Across Wisconsin, agricultural bankers are seeing monumental changes both throughout the banking industry and within the farming communities they serve. To assist bankers in preparing for the many conversations beyond the traditional discussions of financing, the Wisconsin Bankers Association’s (WBA) Agricultural Bankers Section is excited to announce the WBA Agricultural Bankers Conference this spring!

Each year, more than 125 ag bankers from across the state come together for the two-day event featuring over seven hours of presentations, the opportunity to network with peers, and exhibitors offering products and services geared specifically at ag banking.

The 2023 conference will kick off on April 13 with an update from Eric Snodgrass of Nutrien Ag Solutions. Snodgrass, a science fellow and principal atmospheric scientist, will provide a weather update that focuses on how high-impact weather events influence global agriculture productivity. His current research uses machine learning to better understand field-level weather impacts on yields in the U.S. and to increase confidence in long-range weather prediction.

Throughout the first day, ag bankers will have the chance to network with peers from across the state and hear from several other speakers Leonard Polzin from the University of Wisconsin Madison and Edwin Elfmann of the American Bankers Association (ABA).

The following day, April 14, attendees will reconvene for a keynote session by Dr. David Kohl, professor emeritus at Virginia Tech Department of Agricultural and Applied Economics.

During his engaging presentation, ag bankers will gain strategies and actions to utilize in positioning their local agricultural businesses to take advantage of opportunities and negate adversity. Dr. Kohl highlights that a few key takeaways from his presentation include the business IQ assessment, financial ratio benchmarking tools, and non-financial factors that bankers can apply as they work with their customers.

Following the keynote, Dr. Kohl will hold a Q&A session to provide attendees with insight, best practices, and outlooks for the upcoming year ahead.

“In this fast-paced world, I encourage agricultural bankers to attend this year’s WBA Agricultural Banking Conference to be informed, network, and learn strategies that can help them take action,” says Dr. Kohl. “The current environment of volatility, higher interest rates, and inflation mean that bankers need to be prepared to work side by side with their borrowers to assess risk and help ensure adequate liquidity to weather adversity.”

Interested in attending and joining ag bankers from across the state this April 13–14? Visit wisbank.com/ag to learn more and register today!

Register Now
March 13, 2023/by Hannah Flanders
https://www.wisbank.com/wp-content/uploads/2023/03/Farm-Hay-scaled.jpeg 1309 2560 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2023-03-13 08:14:572023-03-13 08:14:57Helping Ag Bankers Stay Ahead of Industry Challenges
News

Two UW Students Awarded Agricultural Banking Scholarships

Pictured (left to right) are: Jeff Gruetzmacher, senior vice president and director, Royal Bank; Shania Sake, branch manager, Royal Bank; Cassandra Krause, executive director, Wisconsin Bankers Foundation; Elle Horn, 2022 Agricultural Banking Scholarship recipient; and Dan Ravenscroft, president and CEO, Royal Bank.

The Wisconsin Bankers Foundation, the non-profit arm of the Wisconsin Bankers Association, has awarded UW-Platteville freshman Elle Horn and UW-River Falls junior Colby Von Haden with the 2022 Agricultural Banking Scholarship. The scholarship is awarded annually to two students who are pursuing a career in agricultural finance and who demonstrate in their application a strong understanding of the importance of financial literacy.

Horn is a declared agribusiness major and is currently employed as a teller at Royal Bank in LaValle, Wis. Growing up on her family’s beef and dairy farm, Horn developed a passion for volunteering and educating those in her community on agricultural topics. She now enjoys regularly being involved with Block & Bridle, Future Farmers of America (FFA), and 4-H.

Pictured (left to right) are: Dr. Brenda Boetel, professor and department chair, University of Wisconsin – River Falls; Dr. Dean Olson, associate dean and professor, University of Wisconsin – River Falls; Cathy Asher, ag relationship manager, Security Financial Bank; Colby Von Haden, 2022 Agricultural Banking Scholarship recipient; Cassandra Krause, executive director, Wisconsin Bankers Foundation; Isaac Christenson, ag loan officer/credit analyst, Pillar Bank; and Michael DeLong, vice president – commercial/ag loan officer, Pillar Bank.

Von Haden is a declared agricultural business major expected to graduate in December 2023. He currently serves as the president of UWRF’s Beef Management Team as well as vice president of its Block and Bridle Club. Additionally, Von Haden is an active member of the university’s CAFES Student Advisory Council, Alpha Gamma Rho – Alpha Psi, and the Monroe County Jr. Fair Board. Previously, Von Haden worked as a business analyst intern at Bank First, Tomah.

“The commitment both Elle and Colby demonstrate to the agricultural industry and serving their communities is a fundamental aspect of the Wisconsin Bankers Foundation’s Agricultural Banking Scholarship,” said Foundation Chair Rose Oswald Poels. “I am pleased that we are able to honor Elle and Colby for their achievements with this scholarship and wish them much success in their future agribusiness careers.”

March 3, 2023/by Hannah Flanders
https://www.wisbank.com/wp-content/uploads/2021/09/Untitled-3_Yellow.jpg 972 1920 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2023-03-03 11:55:222023-03-06 08:01:24Two UW Students Awarded Agricultural Banking Scholarships
Corn seedling
Community, Resources

From The Fields: Remaining Proactive

By Jenny Jereczek, Security Financial Bank, Durand

ESG. . . yet another acronym to add to the ag lender’s vocabulary! Environmental, social, and governance (ESG) reporting requirements have been a topic of discussion for several years now, and these discussions continue to gain headwind. Rather than regulatory reporting requirements focusing strictly on financial considerations, investors and regulatory agencies are now considering a broader set of decision-making criteria, which includes ESG ratings. Most recently, bond investors have begun to question ESG ratings for producers who received financing with the bonds the investors are purchasing.

While regulators have not yet standardized ESG reporting, these ratings may have significant impacts on ag banks and their clients. A few things to keep in mind when discussing ESG ratings within your institutions or with your ag clients:

  • Currently some ESG frameworks only mandate reporting of emissions and energy consumption. Going forward, financial performance and ESG ratings may also be impacted by the following:
    • Changes in water availability, sourcing, and quality
    • Tillage practices and their impact on soil health
    • Use of chemicals, fertilizers, and solid waste disposal
  • Consumer groups continue to use ESG ratings to pressure companies along with lenders to be “green” even though metrics to determine what “green” really means have not be identified or standardized.
  • Often the focus of agriculture’s environmental impact is negative, focusing on things such as risks from deforestation, pesticide usage, fertilization application rates, animal welfare, and manure disposal. Yet the agricultural sector can also have a positive environmental impact, such as the creation of alternative fuels — as we have seen with ethanol and biodiesel production as a means reduce the total consumption of fossil fuels. Education and communication with the consumer should be a primary focus for producers, lenders, and all that partner with the agricultural community. The American public cannot support what it does not understand.
  • Most producers are already deeply committed to improving sustainability as well as using technology to reduce inputs and costs. With fertile land availability outpacing demand and freshwater needs exceeding supply, the importance of sustainability should not be driven solely by reactions to investor attitudes, but more so from a place of improving efficiency and profitability to ensure longevity of the operation.
  • ESG ratings are driven by governmental entities — therefore without clear objective standards — and ESG regulations within the looming 2023 farm bill or federal financial regulations could be of concern and could affect farm bill and federal crop insurance payments.

While the impacts of ESG ratings are not totally known today, we can be certain that there will be impacts to our producers and our institutions. As lenders, we need to keep up with developments regarding potential legislation surrounding ESG ratings. We also need to encourage education amongst not only consumer groups but our producers to be proactive in our approach to dealing with future ESG requirements.

Jenny Jereczek is market president and director – ag banking with Security Financial Bank in Durand. Jereczek currently serves on the WBA Ag Section Board of Directors.

February 21, 2023/by Hannah Flanders
https://www.wisbank.com/wp-content/uploads/2021/10/bigstock-Growing-Young-Green-Corn-Seedl-434551325.jpg 1067 1600 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2023-02-21 15:19:002023-02-28 15:33:07From The Fields: Remaining Proactive
Community, Resources

From The Fields: Rising Interest Rates and Their Effect on Production Agriculture

By Lance Lansing, Wisconsin Bank & Trust

While many of us were alive when interest rates reached the record high of 20% in March of 1980, not many of us were in lending at that time. According to bankrate.com, the inflation rate at the time was 14.6% and Fed used their main tool and increased interest rates to combat inflation. As a result, the U.S. central bank manufactured a recession to bring prices back down. Although I have never claimed to be an economist (or played one on TV), it does not take a Harvard grad to see that the Fed is once again using its main tool to combat inflation. The current Fed, instead of wielding a sledgehammer on rates, is much more subtle by slowly and gradually moving rates in one direction. However, desperate times…etcetera.

The Fed has chosen to raise interest rates six times over the past year with four straight three quarter point increases pushing borrowing costs to a new high since 2008. The March 2022 hike of a quarter point was the first hike since 2018. The Fed has chosen to raise interest rates with the objective of reducing the total amount of money circulating through the economy, called the money supply. The Fed also tries to control the money supply through quantitative easing, which is the process of buying and selling Treasury Department backed assets. Both tools are used by the Fed to try to reduce inflation. Inflation can be caused by many factors. It is generally the result of too much demand and insufficient supply, leading to high prices. Many people received excess funds during the pandemic and along with supply chain disruptions, this has resulted in rising demand for items, an inability to get those items and an increase in the cost for those items.

A Fed manufactured recession will affect us all in many ways personally and professionally. High inflation and rising interest rates will likely erode a farm business’ liquidity. While our producers have been paying attention to the increase in commodity prices and resulting revenue, they have also noticed the quickly rising input costs due to increased inflation. Should commodity prices start to decline, costs may remain elevated and be slow to go down. Profit margins will be compressed, and some may even become negative. The Ag economy will see new risks with the rising interest rates and input costs. The direct impact on farmers that are borrowing money will be significant. For example, a line of credit that has risen 3.75% from 4.75% to 8.5% since March of 2022 with an average balance of $1,000,000, will require a monthly interest payment of $7,083 vs. $3958, adding an additional $37,500 per year interest expense to their cash flow. This will, of course, impact repayment capacity, liquidity, and depending on the operation, increase cost of production to a level that will compress margins and seriously impact their operation’s profitability.

Many operations chose to increase their liquidity during the pandemic through higher commodity prices and government program payments to pay down dept. However, rising input costs and possible tax liability will increase demand for short-term borrowing. With the increased demand of short-term loans comes the risk of increased variable rates. If margins compress, more operations will seek out loans to compensate for the short falls.

Another risk from higher interest rates is the impact on expansion. When a neighbor’s farm comes up for sale, the cost per acre of owning that land has jumped significantly. A loan early in 2022, with a fixed rate at 4.25% over a 20-year amortization would now hold an interest rate of 8%. Most producers would be tempted to jump at an opportunity to buy 100 acres of adjacent land for $10,000/acre. Since most operations are asset rich and cash poor, the producer in this example will opt to finance 100% of the purchase. The total cost of $1,000,000 for 100 acres, would equate to an annual cost per acre of $747 at 4.25% vs. $1,012 at 8%. This $265 cost per acre increase would impact repayment capacity and margin. The impact of record high land values and increase in interest rates may result in producers passing on expansion opportunities and focusing on deleveraging and positioning themselves for a change in the economy.

Producers and lenders will be affected by the rate increases in several ways. The profit margins for both could be adversely affected as well as the number of opportunities for new loans and growth. Navigating this time will depend on how much higher the rates will increase and for how long before a hiccup in the economy brings them back down.

Lance Lansing is vice president of commercial and ag loans with Wisconsin Bank and Trust in Monroe. Lansing also currently serves on the WBA Agricultural Bankers Section Board of Directors.

 

January 31, 2023/by Lori Kalscheuer
https://www.wisbank.com/wp-content/uploads/2021/10/istock-175471771-economy-2.jpg 500 810 Lori Kalscheuer https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Lori Kalscheuer2023-01-31 08:04:202023-02-01 07:42:01From The Fields: Rising Interest Rates and Their Effect on Production Agriculture
Community, Resources

From The Fields: Change Happens

By Darla Sikora, Citizens State Bank of Loyal

Greetings fellow Ag Bankers! As another year sprints to a close, it’s only natural to reflect on the changes of the past few years. In our line of work, we don’t have to look back very far to see the monumental changes in the world of agriculture. Take farm numbers for example. Focusing on dairy agriculture, as we tend to do here in Wisconsin, according to the National Agricultural Statistics Service we had about 25,000 dairy farms in 1995, with 9,304 as of January 2017. As of September 2022, the Wisconsin Agricultural Statistics Service data indicates we now have about 6,300 dairy farms or a decrease by nearly a third in the past five years. Coupled with Wisconsin’s continued dairy productivity, our farming landscape changes in a myriad of ways.

Photo provided by Darla Sikora. A new life, a new year on the horizon.

Honing in on 2022, in addition to our customers dealing with significant increases in farm operating costs, interest rates began to rise at a rapid pace. Before March, the last Fed Funds Rate increases were in 2017 and 2018 and those were 25 basis point increases, nothing like the four 75 basis point surges (among others) in 2022. Perhaps this is why our jobs never get boring! Every year and every new season we have different circumstances to deal with because our customers have different circumstances to deal with. I recall listening to Dr. David Kohl at an ag banking seminar a number of years ago as he told us that in order to be good at our jobs, we not only need to know our jobs, but we also need to know what our customers face in their farm businesses. That relationship between us and the farms we serve is what makes Ag Banking a rather unique career. Our customers need to know that we understand their situations and challenges so that we can work with them to find the banking products and programs that best fit their farming styles, needs, goals, and objectives.

In part, to continue to be successful, in some ways, farms are changing. Those that are flexible, open to new opportunities, technologies, and practices, and in general are adaptable perhaps stand a better chance for future success. This doesn’t mean that everything on the farm, or elsewhere, should change. From the banking perspective for example, analyzing credits using the old 5 or 6 C’s of credit still makes a ton of sense. Also not wavering too far outside important and useful farm financial numbers and ratios remains sensible for both bank and farm.

The year is nearly finished and a new one is on the horizon. More hours of sunlight will be welcomed and nearly everyone I know eagerly anticipates springtime with new ideas and possibilities. As you gather with family and friends throughout the holiday season, be sure to include plenty of Wisconsin agriculture’s finest in your celebrations! From cheese to egg nog, from cranberries to beef, and hot cocoa made with whole milk, what’s not to love about Wisconsin’s agricultural products! We bid a fond farewell to 2022 and cheers to us all in the New Year!

Darla Sikora is senior vice president of agricultural banking with Citizens State Bank of Loyal. Sikora also currently serves as the Past Chair of the WBA Agricultural Bankers Section Board of Directors.

 

December 29, 2022/by Lori Kalscheuer
https://www.wisbank.com/wp-content/uploads/2022/12/From-the-Fields-calf.jpg 1512 2016 Lori Kalscheuer https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Lori Kalscheuer2022-12-29 09:40:202022-12-30 08:24:30From The Fields: Change Happens
Community, Resources

From The Fields: Happy Halloween!

By Steven Thomas, BMO Harris Bank, Onalaska

Playoff football, tournament volleyball, and cross country meets dominate the local sports scene. Like many, I am heavily invested in my own community’s success this year with an Onalaska football squad still undefeated and advancing to Level 3 of the playoffs for the first time in 20+ years. This past Saturday, I was fortunate to watch three of our runners compete in the WIAA State Cross Country meet in Wisconsin Rapids. Our hometown favorite, Manny Putz, an Onalaska sophomore, won the D1 WIAA Cross Country meet on a beautiful day posting a 0.2 second margin of victory after an all-out sprint in the last 200 meters to the finish of the 5,000 meters run. From the Braveheart like battle charge at the sound of the starting gun to watching the final sprints at the finish. It is a pleasure to watch these gifted athletes give their all.

Like these runners, farmers are on their annual race to the finish of the 2022 harvest season. Travels across the Midwest reveal steady progress in the corn and bean crop bringing in above average yields in areas that received adequate moisture, below average in areas where moisture was dryer conditions prevailed. Corn that is not drying down quickly coupled with higher drying costs are expected to eat into profit margins.

Dryer conditions this fall have made for good harvesting conditions with few weather delays experienced. The annual ritual of fall applied dairy-generated fertilizer is certainly noticeable around the countryside. Fall seeded cover crops and winter grains have mostly been planted.

During this harvest season, beyond the yields coming in, the biggest discussion with clients has been related to end of year planning. Despite all the inflationary pressures, supply chain disruptions and high costs, most clients are looking at solid returns this year. End of year tax strategies will certainly be implemented in the next 2 months as farmers look to mitigate anticipated tax obligations. Meet with the accounts early to develop the plans appropriate for each operation. Tax rates could be adjusted and paying some of the tax burden this year when cash is more readily available can be one consideration. We do anticipate supply chain issues and transportation challenges will continue which could impact chemicals and fertilizer availability that are likely to be prepaid.

Political ads are dominating the airwaves with every candidate trying to make their best case for themselves and make their opponent look as bad as possible. I have my own opinions on those I’ll be supporting with my vote. Fortunately, the election is only a few days away and the ads will stop, but the task of governing in a bipartisan manner with legislative solutions that find common ground and benefit the common good seem to be harder and harder to reach. Your vote is important. Local races, school boards, town boards, school funding referendums all matter. I encourage all to cast your ballot in this very important mid-term election.

Steven Thomas is vice president of agricultural banking with BMO Harris Bank in Onalaska. Thomas also serves on the WBA Agricultural Bankers Section Board of Directors.

 

October 31, 2022/by Lori Kalscheuer
https://www.wisbank.com/wp-content/uploads/2022/10/Cross-country-Run-scaled.jpeg 1707 2560 Lori Kalscheuer https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Lori Kalscheuer2022-10-31 14:28:142022-10-31 15:00:09From The Fields: Happy Halloween!
Community, Resources

From The Fields: Expect Turbulence

By Nicholas Felder

“Ladies and gentlemen please make sure your seat belt is securely fastened and your seat backs and tray tables are in their full upright position.” As many of us know, these instructions are for the safety and soundness of all those aboard commercial aircraft during what might not be a perfect landing. Well, we might all want to heed that advice and reiterate that to all our customers as soon as possible.

As of the date of this article, the American grain producer is facing $6.60 corn (which oscillated from $4.85 to $7.60 down to $5.65 now $6.60) and $13.94 soybeans (same $12.50, then $15.85, then $12.85, then $14.75, now $13.94) which isn’t all bad! However, all the pilots (and the passengers alike) who are flying across the 2022 crop year aren’t exactly sure where the runway is located and in what condition it stands. As they peer down towards harvest and post-harvest, they must deal with a dense layer of fog comprised of inflation, a strengthening dollar, global unrest, weather, mid-cycle fall elections, and the USDA’s export sales reporting system that went down just as these markets couldn’t get any more volatile. Basis spreads between new and old crops are leading the charge to what looks like a pre-harvest rally. However, the Dow and S&P markets are falling precipitously, leading some experts to believe a demand drag on domestic use is the next big hurdle for the 2022 and 2023 crop marketing cycles. Sell now or later? And, if that wasn’t enough, producers and lenders looking at the 2023 growing/feeding/milking year are facing decisions on things like fertilizer and chemical pricing, even before the ’22 crop really starts to turn away from its summer green. Can we really achieve a “soft landing” of any fashion in this environment? It’s the question both farmers and politicians are struggling to answer.

Change and interruption are inevitable in a global and electronic economy. Too many hands in the pot waiting to grab their “fair share,” while people and animals across the globe fight to find their next meal. However, preparation and a good commodity marketing offense is the best defense for headwinds of the nature noted above. It really all begins with cash flows that are created well before final planting decisions made. Then, regularly updating the living, breathing document as itemized expenses change or planting and crop maintenance is completed so it can be an accurate tool to price whatever commodity being produced. These strategies don’t have to be complex; just planned and emotionless. Nickels saved through discipline and, many times, luck create opportunities to land as softly as anyone is able in today’s environment. A producer can’t farm next year if he doesn’t make it through this year.

We all know that equity may be the key to growth, but liquidity is the key to longevity. As we transition into the autumn harvest season, your fellow banking professionals ask that you be that trusted advisor who is slightly risk averse, but supportive of growth and profitable ventures. There is still money to be made and balance sheets will improve if producers are intentional in their actions and lenders the same. The sky can be prevented from falling if we work together!

Thank you all for your service to the industry, diligence and support of America’s producers, and presence within your local communities. Wishing all a safe harvest season!

Nicholas Felder is vice president, commercial and ag banking, with MidWestOne Bank in Lancaster. Felder currently serves on the WBA Ag Section Board of Directors.

September 29, 2022/by Lori Kalscheuer
https://www.wisbank.com/wp-content/uploads/2022/09/Airplane-Corn-scaled.jpeg 1707 2560 Lori Kalscheuer https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Lori Kalscheuer2022-09-29 09:35:522022-09-29 09:36:22From The Fields: Expect Turbulence
Community, Resources

Executive Letter: Investing in Our Future

Rose Oswald PoelsBy Rose Oswald Poels

When WBA’s charitable arm, the Wisconsin Bankers Foundation (WBF), was founded in 2015, education remained a top priority to aid the public in increasing their financial literacy and responsibility.

As part of this, the Foundation is proud to offer well-known programs such as Reading Raises Interest Kits that assist bankers in coordinating curriculum used during Teach Children to Save Day in April and scholarships awarded to students throughout the state for their demonstration of excellent financial capabilities. Involvement in these programs brings the Foundation one step closer to ensuring the financial knowledge and responsibility of every youth in our state.

Now through November 15, the Foundation will be accepting applications for the third annual Agricultural Banking Scholarship!

Students who will be enrolled in an accredited Wisconsin college, university, or technical college during the Spring of 2023 and are pursuing a career related to agricultural banking are encouraged to apply.

With agriculture serving as one of Wisconsin’s largest economic drivers, it is critical that we invest now in the students that are interested in driving this critical sector of our state.

The Foundation is also excited to announce this year’s Agricultural Banking Scholarship award has been increased to $1,500 each for the two qualified winners in order to help combat rising tuition costs, assist individuals in reaching their goals, and promote financial literacy in every consumer.

I encourage you to share this exciting opportunity widely within your networks — current and past ag interns, parents of college-aged children, and educators at the many ag programs throughout the state. By aiding us in spreading the word to qualified students, you play a significant part in assisting the Foundation to serve its mission as well as provide new opportunities for your community!

Please visit wisbankfoundation.org/scholarships to learn more or contact WBF’s Foundation Coordinator Hannah Flanders with any questions.

September 15, 2022/by Hannah Flanders
https://www.wisbank.com/wp-content/uploads/2021/09/Untitled-3_Light-Blue.jpg 972 1920 Hannah Flanders https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Hannah Flanders2022-09-15 07:54:322022-09-15 08:15:15Executive Letter: Investing in Our Future
Community, Resources

From The Fields: Tools to Assist with Price Risk Management

By Jeff Wilke, Bank First

The 2022 inflationary pressures on a milk producer’s costs to produce milk have made the need to manage milk price risk/volatility that much more important. Two relatively economical and user-friendly milk price risk management tools available to dairy producers are the USDA’s Dairy Margin Coverage (DMC) and Dairy Revenue Protection (DRP) programs.

DMC provides dairy operations with risk management coverage that will pay producers when the difference (the margin) between the national price of milk and the average cost of feed falls below a certain level selected by the program participants. The only cost for $4.00 margin “catastrophic” coverage is a $100 administrative fee. For coverage from the $4.00 margin to $9.50 margin levels (in $.50 increments), there is also a premium payment of only $.0025 to $.15 per hundredweight of milk, respectively, on up to 95% of a producer’s recent average of historical milk production (up to a maximum of five million pounds of milk at those premium costs). Coverage for milk production over five million pounds of milk is available at the $4.50 margin to $9.50 margin levels (in $.50 increments), with premiums from $.0025 to $1.813, respectively. Sign up for the program is through the USDA’s Farm Service Agency.

DRP is designed to insure against unexpected declines in the quarterly revenue from milk sales relative to a guaranteed coverage level (“price protection”). The expected revenue is based on futures prices for milk and dairy commodities, and the amount of covered milk production elected by the dairy producer.

DRP offers two revenue pricing options: The Class Pricing Option, which uses a combination of Class III (milk primarily used for cheese production) and Class IV (milk primarily used for butter and non-fat dry milk production) milk prices as a basis for determining coverage and indemnities. The Component Pricing Option, which uses the component milk prices for butterfat, protein and other solids as a basis for determining coverage and indemnities. Under this option the producer may select the butterfat test percentage and protein test percentage to establish their insured milk price.

Through DRP, 80-95% of expected quarterly milk revenue may be covered (in 5% increments). A premium subsidy of 44-55% is provided through the program, depending on the coverage level selected. DRP insurance is available through authorized crop insurance agents.

For more information on the DMC and DRP programs, visit usda.gov.

Jeff Wilke is vice president-business and ag banker with Bank First in Denmark. Wilke currently serves on the WBA Ag Section Board of Directors.

August 26, 2022/by Lori Kalscheuer
https://www.wisbank.com/wp-content/uploads/2021/10/cows-feeding-agriculture-banner.jpg 650 1117 Lori Kalscheuer https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Lori Kalscheuer2022-08-26 14:52:322022-08-31 07:55:58From The Fields: Tools to Assist with Price Risk Management
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Events

Agriculture, Commercial Lending, CRE Lending, Credit Analysis, Credit Management, Lending, Training and Development

WBA Agricultural Lending School

The 2023 WBA Agricultural Lending School will be held August 22–24, with an optional pre-school workshop on August 21, at the Wisconsin Bankers Association office in Madison. Classes will begin at 9:00 a.m. on Tuesday and conclude at 3:00 p.m. on Friday. This school was developed as an intermediate-level school. Case studies, in-class work, class discussions, and a farm visit are all elements of this school.

An optional pre-school workshop has been added on August 21. This optional workshop is geared towards those ag lenders and credit analysts who would like to strengthen their foundational knowledge of ag financial statements, the 6 C’s of Credit, and look at some initial ratios. The 3-day school curriculum is based on attendees having an intermediate-level knowledge of these topics. If you’d like a refresher or to reinforce your ag financial statement knowledge, sign up to attend this optional workshop during registration.

Curriculum Includes:

  • “Lenders’ Lens” on Agriculture Today
  • Cyclical Nature of Agriculture
  • Borrower and Lender Relationship
  • Agricultural Financial Statements
    • Farm Business Financial Model for Informed Decisions
  • Cash Flow Budgeting
  • Introduction to Financial and Credit Analysis
  • Financial and Credit Analysis
  • Risk Management
  • Commodity Marketing
  • Credit Structuring
  • Credit Enhancements
  • Loan Narrative/Credit Presentation
  • Farm Visit & Recap
  • Introduction to Problem Loans
    • Looking for Red Flags
  • Bank Policy
  • Preparing for Loan Committee

Optional Pre-School Workshop Curriculum Includes:

  • Farm Business Financial Model for Informed Decisions – a focus on the building of financial statements
    • Balance Sheet
    • Income Statement
    • Statement of Cash Flows
    • Reconciliation
  • The Building Blocks for Credit Decision Making – the 6 C’s of Credit

School Faculty:

  • Bradley Guse, senior vice president – agribusiness banking, BMO Harris Bank, N.A., Marshfield
  • Dr. Kevin Bernhardt, professor and UW Extension Farm Management Specialist, UW-Platteville

Who Should Attend:
This school is designed for ag lenders with a few years of experience, or for those lenders who would like a refresher. Credit analysts, processors, and other ag lending staff will also benefit. Those attendees with less than 2 years of experience should consider registering to attend the optional pre-school workshop on August 21, 2023.

School Requirements:
Successful completion of the school will be based on class attendance and participation on a team for a comprehensive case study including a presentation on the final day.

Registration Information:
The student fee of $895 includes program registration, instruction and materials, and lunch and refreshment breaks daily. Dinner will be provided Thursday evening with the farm visit. Registration for the optional pre-school workshop is an additional $200/attendee.

March 21, 2023/by Anna Lorang
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Agriculture, Credit Management, Featured Event, Lending

Agricultural Bankers Conference

The 2023 WBA Agricultural Bankers Conference will be held on April 13–14 at the Kalahari Resort & Convention Center in Wisconsin Dells. The conference will kick off at 9:00 a.m. on Thursday and adjourn at Noon on Friday.

This annual meeting of the WBA Agricultural Bankers Section brings together agricultural bankers from all around the state of Wisconsin for education and networking. Attendees will benefit from over 7 hours of presentations from nationally recognized speakers; network with more than 125 banking peers; and meet several exhibitors who offer products and services geared for ag banking. You won’t want to miss this great event!

Visit the conference website for more information on the conference agenda, topics, and our speakers.

Registration Information

Bank Member Registration: The registration fee of $350/attendee includes conference materials, Thursday refreshments, lunch and reception; and Friday breakfast and refreshments. Members of the WBA Ag Bankers Section* receive a discounted registration fee of $300/member. *Membership in the WBA Ag Bankers Section is by individual membership, not by bank membership. Please contact WBA’s Lori Kalscheuer at 608-441-1250 with any questions regarding section membership.

Exhibitor Registration: Exhibit Booths are available for $600 and includes registration for one attendee. Additional booth attendees can be registered for $350/attendee. Visit the Information For Exhibitors/Sponsors page for more information. Electrical, shipping, and other services will be made available through the Kalahari. More information will be provided to registered exhibitors in March. Interested in upgrading your presence? Register to be a conference sponsor to receive additional benefits and conference recognition!

January 6, 2023/by Lori Kalscheuer
https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg 0 0 Lori Kalscheuer https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Lori Kalscheuer2023-01-06 13:39:402023-01-13 11:42:34Agricultural Bankers Conference
Agriculture, Credit Analysis, In Person, Lending, Training and Development, Webinar

WBA/ABA Introduction to Agricultural Lending

A review of the fundamental skills needed to begin to undertake credit analysis, loan structuring and monitoring for agricultural customers. The course also provides guidance on dealing with problem loans. This course was developed in conjunction with the Schools of Banking, Inc., a jointly-owned subsidiary of the Kansas and Nebraska Bankers Associations.

There is no separate textbook for this course. All reading materials are posted online in the Learning Community of your course.

June 7, 2022/by Anna Lorang
https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg 0 0 Anna Lorang https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Anna Lorang2022-06-07 09:52:062022-06-13 14:44:45WBA/ABA Introduction to Agricultural Lending
Agriculture, Credit Analysis, Credit Management, Lending, Webinar

WBA/ABA Introduction to Agricultural Lending

A review of the fundamental skills needed to begin to undertake credit analysis, loan structuring and monitoring for agricultural customers. The course also provides guidance on dealing with problem loans. This course was developed in conjunction with the Schools of Banking, Inc., a jointly-owned subsidiary of the Kansas and Nebraska Bankers Associations.

Audience: Those new to agricultural lending or with limited experience

Price: $475

March 4, 2022/by Anna Lorang
https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg 0 0 Anna Lorang https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Anna Lorang2022-03-04 11:53:482022-05-31 13:13:53WBA/ABA Introduction to Agricultural Lending
Agriculture, Credit Analysis, Credit Management, Lending, Webinar

WBA/ABA Introduction to Agricultural Lending

A review of the fundamental skills needed to begin to undertake credit analysis, loan structuring and monitoring for agricultural customers. The course also provides guidance on dealing with problem loans. This course was developed in conjunction with the Schools of Banking, Inc., a jointly-owned subsidiary of the Kansas and Nebraska Bankers Associations.

Audience: Those new to agricultural lending or with limited experience

Price: $475

March 4, 2022/by Anna Lorang
https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg 0 0 Anna Lorang https://www.wisbank.com/wp-content/uploads/2021/09/Wisconsin-Bankers-Association-logo.svg Anna Lorang2022-03-04 11:53:292022-03-04 11:53:29WBA/ABA Introduction to Agricultural Lending

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