Tag Archive for: Agriculture

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Serving Amish and Mennonite Communities in Rural Wisconsin

Map created by Mark L. Louden

By Cassandra Krause

The Amish may not be the first group to come to mind when thinking about the fastest growing populations in the United States (and even the world), however these communities — whose populations double about every 20 years — play an important role in rural America, especially in Wisconsin. The Amish trace their heritage on this continent back about 300 years, when a small group of settlers immigrated to colonial Pennsylvania. According to the Max Kade Institute for German American Studies, today, there are approximately 350,000–400,000 Amish in North America (none remain in Europe), with more than 21,000 calling rural Wisconsin home. Wisconsin has the fourth-largest Amish population among 32 U.S. states and four Canadian provinces. Wisconsin also has a population of approximately 5,000 Old Order Mennonites as well as smaller numbers of other Mennonite groups and Old German Baptist Brethren. These groups are collectively described as Plain people, referring to their plain style of dress. Plain communities add to Wisconsin’s diversity and are familiar faces at many community banks.

Who Are the Amish and Mennonites?

Dr. Mark Louden, professor of German linguistics at UW–Madison and director of the Max Kade Institute, is a leading expert on the language and culture of Amish and Mennonites. He explains that Amish and Mennonites are Anabaptist Christians who practice believer’s baptism (babies are not baptized; rather, members formally join the church as teens/young adults) and are nonresistant, meaning that they do not engage in violence, including serving in the military. Old Order Mennonites and Amish wear modest, traditional clothing as an outward expression of humility. Women wear simple dresses and a veil, also called a prayer covering or kapp, over their hair. A larger bonnet is something that may be worn over the veil. Men wear solid-colored shirts and suits with wide-brimmed hats. The degree to which Plain people limit the use of technology depends on the group — as is the case in mainstream American culture in which some people may, for example, limit screen time or opt for a paper calendar rather than a digital one. Most Amish groups do not have electricity in their homes and do not own or operate motorized vehicles.

Farming and Beyond: Economic Activity

Plain people are active in a number of areas of the economy. The percentage of Amish families that depend on agriculture as their main source of income is only around 10–15% nationally, however, Amish and Old Order Mennonites live in rural areas and typically have large gardens. Businesses commonly owned by Plain people include carpentry — especially in Wisconsin where lumber is abundant — construction, and retail stores selling quilts, crafting supplies, bulk food, and baked goods. Outside of Wisconsin, some Amish are employed by non-Plain-owned businesses such as factories.

Finances in Amish and Mennonite Communities

Amish and Mennonite communities practice mutual aid, which sometimes involves assisting each other financially. Amish do not purchase commercial insurance or accept government assistance, so when there is a special need, the community steps in to help. They also do not typically take out loans other than mortgages for property, especially farms. Business loans are very uncommon, as the types of businesses Amish run are generally relatively small and do not require large amounts of capital to start up or grow. Amish farmers also do not use the types of equipment that other farmers may borrow larger sums for. Louden notes that “Amish and Mennonites are known for being extremely good customers. . . bad debt is hardly a concept.” He adds that if, in a rare instance, somebody were unable to pay their mortgage, the community would likely step in to, “not necessarily give them a lot of fish, but teach them to fish,” in order to help them with their money management and get them back on their feet. Louden emphasizes that financial responsibility is important in Amish and Mennonite culture.

Louden said that a misunderstanding persists that the Amish do not pay taxes, when they do, in fact, pay income and property taxes. The only exception has to do with Social Security and Medicare taxes. Members of Amish, Old Order Mennonite, and other churches who decline any form of government assistance may apply for an exemption from Social Security and Medicare withholding by filing IRS Form 4029.

Tips for Best Serving Amish and Mennonite Customers

“Small scale and face to face is preferred” when it comes to banking Amish and Mennonite customers, Louden explains. “Folks who work in banks in small communities in proximity to Amish and traditional Mennonites get to know their Amish and Mennonite customers well and see them a lot because they’re coming in there. . . they’re even using the drive through windows with their horse and buggy.” He said that there aren’t really special accommodations bankers need to make for their Amish and Mennonite customers; just treat them in the same friendly manner they do for any other customer. Amish and Old Order Mennonites are fully bilingual in Pennsylvania Dutch and English, so translation is not needed.

Having a hitching rack available for parking is considered a best practice for banks and other businesses (e.g. Walmart, Costco, etc.) that serve Amish customers. A 2021 Banking Dive article highlights how a community bank in Lancaster County, Pennsylvania (home to one of the largest Amish populations), took an even more creative approach. The Bank of Bird-in-Hand debuted their first “gelt bus,” which translates from Pennsylvania Dutch to “money bus,” for mobile banking in 2018. They now offer a fleet of bank branches on wheels to visit their Amish customers.

Amish and Mennonites tend to use checks most frequently and will balance their checkbooks by hand. They will use debit cards, and many will use credit cards; paper statements in the mail are usually preferred.

Photo identification may be a topic banks need to navigate, as many Amish do not like to have their photo taken due to religious belief. “Banks are required by law to establish a reasonable belief as to the true identity of their customers,” notes Scott Birrenkott, WBA director – legal. “Fortunately, the law does give some flexibility. In that regard, a bank working with Amish customers should consider how their policy is tailored given the unique lifestyle of the Amish.”

Sheila Kast, BSA Officer, AVP at Horicon Bank, explains that their bank’s Amish customers do have Social Security numbers and cards. For their Amish customers in the Kingston area, their deposit and loan operations team will verify the customer’s name in the Kingston Amish Directory. For verification of identification, Horicon Bank requires at least two of the following documents:

  • Social Security Card (required)
  • Property Tax Bill
  • Tax Document/Tax Return
  • Marriage Certificate
  • Birth Certificate
  • Fishing/Hunting License

On the lending side, banks may find that mortgages for Amish customers necessitate unique procedures since they do not have electricity or carry insurance. A lender may find difficulty working with investors if the borrower is unwilling to obtain homeowners insurance, requiring a tailored risk management approach. Birrenkott explains that some banks may have policies tailored to working with Amish borrowers. For example, Horicon Bank has indicated that policies from the Amish Aid (a non-profit alternative to commercial insurance) are accepted for insurance. The issue of flood insurance may offer less flexibility, however, because if the property is in a flood zone, Federal law requires flood insurance with no exception due to religious belief.

A Look Ahead at Wisconsin’s Rural Communities

As Wisconsin experiences shifting demographic and migration trends — particularly outmigration from rural areas as younger people flock to urban and suburban areas — it is important to recognize the role of the growing populations of Plain people in rural communities. Amish, for example, have on average six to seven kids per family, approximately 85–95% of
whom formally join the church as young adults, depending on the group. This is notable, as national trends show younger Americans identifying less and less with formal religion. Data from the Pew Research Center in 2015 showed the highest retention rates for Millennials were among Jews (70%) and those raised unaffiliated with a religion (67%), followed by those raised in the evangelical Protestant (61%), historically black Protestant (60%), Catholic (50%), and mainline Protestant (37%) traditions.

Plain people are woven into the fabric of their rural communities. As such, they play an integral part in the past, present, and future vitality of Wisconsin.

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From the Fields: Leading to Prosperity

By Nicholas Felder

I’ve been reading Capitalism in America (2018) by former Federal Reserve Chairman Alan Greenspan and Adrian Wooldridge and it actually surprised me about the size and scope of many of the economic growths our young country has had. It’s a good read if you have the time (nearly 600 pages), but long story short, nearly all of the periods of economic prosperity in the U.S. have been driven by businesses leaders looking to change their industries by taking a new or good idea and making it better. This initially causes chaos, but generally results in a rebirth of prosperity. All of these periods were generally led by a single person or a host of individuals whose expertise and knowledge were relied upon to lead the charge.

Opportunities that I’ve been asked to review over the last 12 months include vertical integrations, horizontal acquisitions, repair versus replace, and R&D to either create new business lines or add value to existing ones; creative destruction in its finest. Requests for liquidity have been minimal due to the profitability of most operations and the governmental assistance of others. These opportunities came from some of the most unlikely operators: some with little experience in the new ventures and some attempting to pivot back into old business lines to adjust to the new post-COVID economy. My job, like all of yours, isn’t to tell people if the opportunity will succeed or fail, but to be an advisor and assessor of risk and how that risk might be mitigated by our customer or prospect.

SBA, USDA, FSA loan and guaranty programs are all time-tested vehicles for reducing repayment risk. Energy efficiency grants through energy providers or the USDA’s REAP grant can be a ton of paperwork that may need professional grant writers or facility auditors to complete but may provide significant equity capital that may reduce collateral risk and reduce debt service requirements. Guarantors, individually or corporate, may reduce the performance risk through guarantee of payment or addition of collateral. But how many of us in our peer group adequately assess the operational or human risk? I know that I sometimes glaze over the need to ask: “Who’s the next person up if you can’t perform your duties tomorrow?” or “When you look to cash out and retire in 3–5 years, do you have an identified buyer or plan?” We assume the president or CEO will be there for the long haul.

Within that same 12 months, I’ve had a business owner be diagnosed with brain cancer; I’ve had a farmer look to encourage a more owner-like mentality by bringing a non-familial key employee into ownership through a stock bonus/gift (where there’s limited next-generation prospects); I’ve had a grain farmer look to add efficiencies and add value to the product he sells through expansion during the current near-recessionary period. All these high-level business owners exhibit an “executive mindset no matter the size of the operation” which is a key success factor of Dr. David Kohl of Virginia Tech. All of these owners are in the trenches every day turning wrenches, driving equipment, handling materials, handling the HR duties, and purchasing raw materials. However, they take time to step back to assess the long-term consequences of decisions that are or will be made on the long-term viability of the business. When they call to discuss an idea, it is often the 100th iteration they’ve assessed and the likelihood of success is very high (which makes my job a little easier).

Recessionary periods weed out the weakly capitalized, those with lean cashflow, and those who don’t take those steps back to see the whole picture before making those trajectory-altering decisions. The word “recession” seems to have only negative connotations within the general public, but so does “spring cleaning” in my own home. Both are a means of reset, renewal, and setting the stage for an anticipated revival. In banking, recessions often tighten credit standards and the need to dot all the I’s and cross all the T’s that often get glazed over during times of good fortune — including the assessment of human capital in business. I’m unsure that the current soft landing will establish these resets, but I encourage all the bankers in the industry to do a little spring cleaning of your processes and procedures and ask a few more hard or maybe uncomfortable questions to ourselves and our customers with the premise of better service and being a stronger advisor.

Have a great fall season!

Felder is vice president – commercial and agricultural banking at MidWestOne Bank in Lancaster. Felder also serves on the 2023–2024 WBA Agricultural Bankers Section Board of Directors.

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From the Fields: Fall Transitions

By Steven Thomas, BMO

Transitioning from summer to fall brings with it the excitement of the fall sports seasons. Friday night football, volleyball games, and cross country meets. A new quarterback in Green Bay. New leaders for Wisconsin Badger Football. New schools, new classes, new students, and new routines for parents, children, and teachers as they get back to school.

Transition is the name of the game for our household as my wife and I prepare for empty nesting. It certainly feels strange after 10 years of having an Onalaska High School student in our household. Our oldest has entered his third year in the financial training program with Ecolab in Houston, TX. Our middle child graduated UW–Madison and has transitioned to working on her Masters at Winona State for Athletic Training. Our youngest heads to the collegiate ranks to study Sports Psychology and has been aggressively working on preparing for the UW–La Crosse Track and Field team. We are excited about the career advancement and experiences the future holds for them.

Fall also presents expectations for harvest and transitioning from the growing season to harvest push. Drought conditions have persisted across the Midwest in varying degrees. In my travels from western Iowa, southern Minnesota, and southern Wisconsin corn, soybean, and alfalfa fields look to be in pretty good condition with fourth crop hay giving more substantial yields than many second and third cuttings. Most of the wheat is harvested. Pollination for corn appears to have been successful with many getting prepared for corn silage harvest. It is advisable to be checking moistures regularly as drought stressed corn looks to be drying down and nearing harvest targets. Weather conditions in late August and early September with temps approaching triple digits will certainly accelerate harvest timing.

For those of us who like to eat, the U.S. Agriculture industry will be transitioning this year as our elected officials are in negotiations toward the development of the new 2023 Farm Bill. The new rendition is due on September 30. Wisconsin 3rd District Congressman Derrick Van Orden hosted a listening session last week in La Crosse with U.S. House of Representatives Ag Committee Chairman G.T. Thompson and Sen. Ron Johnson fielding questions and listening to comments from representatives of the agricultural community. Agriculture is the number one industry in 49 of 50 states, despite having an ever-diminishing number of producers actively involved in production. Hawaii is the only state where ag is not number one due to their tourism industry. Rep. Van Orden expressed that agriculture and food security are key to national security and that discussions on the new farm bill are critical in this legislative session.

Over 300 people attended and those offering comments expressed questions and thoughts on a wide variety of topics. Primary areas of interest included milk pricing and revisions to the milk marketing orders and producer price differentials. Dairy Margin Coverage and Crop insurance programs were mentioned with Chairman Thompson expressing continued support for the funding and potential expansion of these successful programs

Negotiation on trade agreements were raised with Mexico, Canada, and China being major trading partners. The war in Ukraine was mentioned for the world and national impact. Proposition 12 and its potential impact on interstate trade. Border policy and related impacts on the labor force. Other topics included biofuels, organic certification standards, foreign land ownership, autonomous agriculture, dairy supply management, cannabis regulations, conservation programs, and farm ownership transitions.

Thompson, Van Orden, and the rest of the Ag Committee will be working to develop a bipartisan bill supporting our number one industry. They are continuing to collect verbal and written comments. If you have feedback, I encourage you to reach out to your state or U.S. representatives or Rep. Van Orden at 202-225-5506.

For this ag transition, Chairman Thompson expressed appreciation for everyone attending and quipped that “if you are not at the table, you are on the menu.” He welcomed the input received and is certainly a champion for agriculture at the federal level.

Make your voice heard and enjoy your transitions this fall.

Thomas is vice president – commercial relationship manager at BMO in Onalaska. Thomas also serves as a member of the 2023–2024 WBA Agricultural Bankers Section Board of Directors.

Photo courtesy of Christy Besonen, East Wisconsin Savings Bank

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From the Fields: Milk Pricing Through the FMMO

Jeff Wilke

By Jeff Wilke, Bank First

In the early 1900s, chaotic fluid-milk pricing, dealers who squeezed dairy farmers on prices, and overall unfavorable economic conditions left farmers with low prices and chaotic markets. To combat this, the federal government established the Federal Milk Marketing Order (FMMO) system in the 1930s.

FMMOs establish provisions under which dairy processors (milk handlers) buy fresh milk from dairy farmers who supply a marketing area (there are 11 marketing order geographic areas in the U.S.) Under FMMO regulations, the USDA establishes a minimum milk price, and dairy processors are required to pay at least this minimum price to producers.

The two main features of the FMMO system are classified pricing and pooling of milk. The FMMO system recognizes four different classes of milk: Class I (fluid milk), Class II (soft products such as yogurt and ice cream), Class III (cheese — what most of Wisconsin milk is processed for), and Class IV (butter and milk powder). Milk handlers report all milk receipts by end use. The FMMO then values this “pool” of milk receipts through formulas to compute milk class and milk component (butterfat, protein, and other solids in milk) values. Milk handlers pay producers at least the weighted-average of all class uses, known as a “uniform” or “blended” price.

Class I fluid milk usually receives the highest minimum price under the FMMO system. This helps to encourage the movement of milk from milk-surplus areas into milk-deficit areas, and ensures a sufficient supply of fluid milk to meet heavy demand (i.e. — during the school year). By pricing surplus milk (milk in excess of fluid needs) at a lower price than fluid milk, classified pricing prevents such supplies from depressing the price of milk to dairy farmers to the point where the supply may become endangered. The minimum prices aim to protect milk producers from severe price reductions that might occur during times of milk surplus.

FMMO pricing formulas have not been significantly updated since they were first implemented in 2000. But with significant industry changes occurring since 2000 — milk composition, product manufacturing costs, costs of transporting milk, plant closures, and shifts in milk production areas — proposals are being reviewed to help modernize the FMMO system for today’s dairy industry. 38 proposals by 12 different industry organizations have been submitted to the USDA as of the June 14 deadline. As of the writing of this article, the USDA is deciding on whether to hold a FMMO hearing for the proposed changes. If there is a hearing, it will start on August 23.

Wilke is vice president – business and agricultural banker at Bank First in Denmark. Wilke also serves as the 2023–2024 vice chair of the WBA Agricultural Bankers Section Board of Directors.

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From the Fields: Finding All the Puzzle Pieces

By Craig Rogan, Nicolet National Bank

Welcome to June 2023, an almost 360-degree turn on milk prices when compared to a year ago. In June 2022, we had a class III settling price of $24.33 per CWT. As of June 27, 2023 current class III milk price is $14.92 per CWT, a decrease of $9.41 per CWT. The current class III milk price may have your customers thinking like Chicken Little. Surprisingly, when everything may seem out of control, farmers may have more control than they think.

A jigsaw puzzle has hundreds — sometimes thousands — of pieces to complete. Unlike a puzzle that has the image on the box, farmers must create their own picture of profitability. There are tools available to complete this picture to maintain positive margins and profitability. To protect income prices DRP and LGM insurance, straight contracts through milk plant or commodity broker and DMC through USDA are pieces that can be used. If feed and capacity are available in existing facilities, adding cows can create additional efficiencies and income to minimize the decrease in milk income. Farmers create pieces to protect their expenses through contracting mineral, fuel, seed, pre-paid feed, and fertilizer, to name just a few. Selling unused equipment or land also can be utilized as pieces to create their puzzle. A hedging account may be necessary from their bank to utilize and create pieces if the farm qualifies. The puzzle pieces create a complete picture when a farm is open to the market and margins are naturally profitable. These pieces or tools become more valuable in a decreasing income environment like we are seeing today.

A farm open to the market where income continues to decline greater than expenses could find its puzzle pieces in disarray. In this scenario a farm may have a significant portion of their expenses locked in — just like the larger blue connected area of this puzzle. Income could be compared to the smaller colorful section in the middle — a lesser percentage is locked in than expenses; therefore, not protecting the full margin, only a portion. A significant number of stray pieces remain that are needed to complete this puzzle.

The completed picture of profitability is what we all strive for with the operations we work with. Continue to be an integral piece of the puzzle to complete their image. At times you will be needed to set the corner pieces to get the puzzle started, but ultimately the farming operations will need to take the time and effort to complete the puzzle and remain profitable.

Rogan is vice president – agricultural banking officer at Nicolet National Bank in Stevens Point. Rogan also serves as the 2023–2024 Chair of the WBA Agricultural Bankers Section Board of Directors.

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From the Fields: A Rare Breed

By Darla Sikora, Citizens State Bank of Loyal

Greetings fellow ag bankers! In this, my final contribution to From the Fields, I’d like to write a bit about us. By “us” I mean the very small percentage of the population who are ag bankers. Each of us has our own story as for how we ended up in ag banking. For myself, I have been an ag banker for 21 years. I am as fervent today as I was when I started at Citizens State Bank of Loyal that I am in this job not because of banking but because of agriculture. In fact, when I was hired, I didn’t know the difference between a balance sheet and a cash flow! “But you know agriculture,” is what my boss at the time (Gary Sipiorski) replied, and as they say, the rest is history.

One of the very best things about attending the WBA Agircultual Bankers Conference every April is being with individuals from around the state who do what we do. Since there are so few of us, we don’t often get to chat with those who know exactly what we face daily in our jobs. We have a connection with our colleagues on account of the common ground we share, facing similar circumstances and challenges, whether in the field or in the bank; the good and the bad. The information presented by a great line-up of speakers and exhibitors is reason enough to attend the conference, but equally, if not even more important, is networking at the conference with our colleagues from other banks.

Photo of Apollo provided by Darla Sikora

Beyond that, I have had the added privilege of serving on the WBA Ag Section Board for seven years. That brought even more opportunities to learn from others as we communicated thoughts, ideas, and opinions on any number of topics at our meetings and gatherings. We deal with a lot of big stuff in our jobs. As a customer once said, ag bankers have a degree of control on the “purse strings” of many multi-million-dollar ag businesses throughout the state. It’s no secret that fact alone can bring about many levels of stress. Learning from others who have been in similar situations has been a real godsend. Our team of Wisconsin ag bankers not only is willing to share its wisdom, knowledge and experiences, but it also has the ability to do so with a bigger perspective than we can do as individuals. The sense of humor that often accompanies a conversation is a boon as well!

Of course, I can never say enough about Lori Kalscheuer, WBA director – education and our Ag Section liaison. Kalscheuer and her team are the glue that keeps our Ag Section together, focused and organized! Not only is June Dairy Month, but it’s also the start of a new year of membership in the Ag Section. I hope you find as much value in this group as I do. There is no doubt of its merit in helping us to be the best ag bankers we can be for Wisconsin’s agriculture. Thank you for allowing me to serve on the Ag Section Board. I look forward to reading all the future From the Fields and to seeing all of you, a rare breed as we are, at next year’s WBA Agricultural Bankers Conference!

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

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From the Fields: Join Us at the 2023 WBA Agricultural Bankers Conference

By Craig Rogan

Spring is here, meaning the Wisconsin Bankers Association’s (WBA) Agricultural Bankers Conference is just around the corner on April 13–14 at the Kalahari Convention Center, Wisconsin Dells. These days are spent reconnecting with fellow ag bankers, sharing experiences from throughout the last year, and acquiring new and updated knowledge to propel our industry into the future. We will welcome many new ag lending professionals to our industry at this conference as well.

Whether you are new to the Ag Banking Conference or a seasoned pro, there’s always something to be learned; however, some things never change; making sound credit and risk decisions should still be at the forefront of your day-to-day analysis, assessing farm’s management practices today to ensure viability and long-term success remains a crucial piece of the puzzle.

We again welcome Dr. David Kohl, a professor emeritus at Virginia Tech who holds a Ph.D. in Agricultural Economics from Cornell University. Dr. Kohl’s solid agricultural knowledge, paired with his ongoing research and experience, makes him a true ag expert.

The months of April and May leave many farmers focused on when the fields will be dry enough to plant. Eric R. Snodgrass is the Director of Undergraduate Studies for the Department of Atmospheric Sciences at the University of Illinois at Urbana-Champaign. As an educator and engaging speaker, he will discuss if current and projected weather conditions may allow for a rapid jumpstart on this year’s growing season. With his guidance, we will examine the global weather outlook and what this could mean for potential yields outside of the U.S. as well as what role weather plays in affecting grain commodity prices.

Wisconsin is going strong in the dairy industry with nearly 1.27 million cows and 6116 dairy farms across the state. UW-Madison Dairy Markets and Policy Outreach Specialist Leonard Polzin will be speaking and updating us on all things dairy in Wisconsin.

This highlights just a few of the highly esteemed speakers that we are honored to host at this year’s Agricultural Banking Conference. I look forward to seeing you in the Dells! If you haven’t registered but would still like to attend please visit wisbank.com/ag to register today.

Rogan is vice president – ag banking officer at Nicolet National Bank, Stevens Point, and vice chair of the 2022–2023 WBA Agricultural Bankers Section.

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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
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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.

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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.

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questions@wisbank.com

608-441-1200

4721 S Biltmore Ln.
Madison, WI 53718

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