Tag Archive for: Agriculture

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From The Fields: Gratitude in a World of Volatility

By Amy Austin

I recently read The Four Winds by Kristin Hannah, it takes place in the 1930s focusing on life in the Great Plains. The story follows a farm family from Texas that experienced years of bountiful wheat harvests followed by years of severe drought. Due to the lack of conservation practices and moisture the man-made disaster of The Great Dust Bowl was created. After several years of extreme hardship, the family chose to leave their farm behind and travel to California with very little to their name. Once arrived in the San Joaquin Valley, the family expected the land of milk and honey. That was far from the truth, due to the flood of migrants from the Great Plains – there was no work for these Americans as they were viewed as dirty, untrustworthy and criminal by the locals.

Today, there are many uncertainties in the world and in agriculture. This book was a reminder to me that there has always been obstacles that must be overcome no matter where one lives. Generations later, the worries of the farmers we work with aren’t that much different than they were then. Things like funding for government programs, interest rates, looming droughts, immigration, tariffs, providing for their families have always been on farmers’ minds.

I found gratitude in this book. As agriculture lenders, many of the farmers we work with look to us as a resource to be able to answer what will happen to the tariffs and all other issues in the news. Although we are still experiencing the same challenges that our ancestors have for decades, agriculture is better prepared for the fight today than ever before. We learned conservation practices to prevent hundreds of thousands of acres from eroding. Biotechnology has advanced so far that even in a drought year, corn yields remain average. Farm management decisions are now made with information from varying tools and resources. Farmers have social networks across the nation and internationally that connect them with others experiencing similar things.

This is a reminder for all of us and our farmers that we work with that there may be volatility and obstacles in the year to come, but there is proof that so much has already been overcome to be where we are today. We have much to be grateful for.

 

Austin is an ag & business relationship manager at Lake Ridge Bank in Evansville.

 

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Family with hands cupped together holding up patch of soil with plant growing out of it

From The Fields: Reflecting Back on 2024

By Craig Rogan

The 2024 planting season in several areas of Wisconsin will be memorable for the spring rains that limited planting and hay harvest windows. Farms in these areas focused on obtaining enough tonnage for cattle feed through several different methods. Working with their nutritionist and agronomist to calculate the number of acres necessary to be planted for corn silage was a vital process. These meetings allowed for operations to calculate the number of acres they would need to harvest for the necessary tonnage of feed for there cattle. Knowing your carry over inventory and daily usage is important to these calculations. In many cases the farms knew they would end up needed to purchase dry corn then raising their own dry corn or HM corn. Others planted what they could and took prevented plant on several acres while working out contracts with local grain farms to obtain corn silage.  The versatility of farmers is amazing on how they navigate through uncontrolled circumstances to feed their cattle.

A steady increase in milk throughout the year 2024 eased some of the stress that was being added to our dairy farmers from a cash flow standpoint. The decrease in crop inventories will have negative effect earnings when reviewing 2024 financials.

November is one of my favorite times of the year and most notable during the Wisconsin deer hunt, but more importantly the comradery that a deer camp provides. The gathering of hunters to tell stories of previous hunts, discuss current time and the future of the hunting camp. Now is the time to get together with your farmers and discuss history on the farm, current operation and what it entails for 2025 and the future of their operation.

Wishing you all the best as we near the start of 2025!

 

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

 

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From The Fields: A Recap of the 2024 ABA National Ag Conference

By Matthew Hartmann

The 2024 ABA Agricultural Bankers Conference took place at the newly renovated Baird Center in Milwaukee from November 12th to 15th. With the recent election and ongoing challenges in the agricultural industry, there was a great deal for attendees to discuss.

ABA’s Chris Fisher, Ed Elfmann, Blake Earley, and Kirsten Sutton

Members of the ABA’s congressional relations team, Blake Earley, Chris Fisher, and Kirsten Sutton joined ABA’s SVP of Agricultural & Rural Banking, Ed Elfmann, to discuss the impact of the recent election results on banking policy. They noted that the GOP’s control of both the House and Senate could benefit bank-friendly policies. The panel emphasized their role in making every banking priority as bipartisan as possible and discussed the need for strategic advocacy to ensure banking priorities are considered, regardless of which party holds power, as control could flip in two years. Regarding the new Farm Bill, Elfmann noted that there is a slim chance of a vote being included in the lame duck session. He suggested that another extension is more likely to give the Senate time to work on a five-year bill, as the House already has its version, and he doesn’t anticipate much change there. He also provided an update regarding the Access to Credit for our Rural Economy (ACRE) Act, explaining that it will likely be included in tax legislation outside of the lame duck sessions and that including it in tax reform is the best vehicle to move it forward. He mentioned that significant progress has been made, with more Democrats supporting the plan than ever before. However, with Sen. Jon Tester losing his seat in Montana, they might need a new supporter from the minority party in Congress. Elfmann stressed the importance of advocating to key Senate members to support this plan and making sure farmers understand how it will help them. ACRE would enable access to more affordable real estate credit for farmers, ranchers, and rural families by granting banks that serve rural communities the same tax-exempt status on certain earned interest as the farm credit system, allowing banks to offer lower interest rates to farm real estate borrowers and rural homeowners.

The pre-conference workshop, “Buckle Up. Turbulence Ahead.,” set the tone for the conference by highlighting some challenges producers will face in the coming year. Net farm income is projected to decline for the second consecutive year due to continued pressure on prices and higher interest rates. Equipment prices are softening, and in some areas of the country, real estate values have begun to plateau. Reviewing asset valuations with clients to prevent overleveraging and preserve working capital will be crucial. With average interest rates above 8% for the first time in nearly two decades, moving debt down the balance sheet to replenish working capital may be more challenging than it was between 2014 and 2019 when the yield curve was flat. Dr. Kevin Bernhardt’s (Professor, UW-Platteville School of Agriculture) presentation, “Impact of Rising Interest Rates,” was a valuable supplement, reiterating the impact of increased borrowing costs, decreased net farm income, and a slowdown in farmland value growth.

Dr. Kevin Bernhardt

He noted that 35% of agricultural bankers report tightening credit conditions and a rise in Chapter 12 bankruptcies. Lenders anticipate ongoing cash flow challenges resulting in delayed capital expenditures and increased demand for refinancing, while emphasizing the need for greater efficiency and risk management. Bernhardt recommends strategic financial planning, including budgeting for capital expenditures with interest rate contingencies, stress-testing leverage multipliers, and cautious debt restructuring to avoid deadweight debt.

With challenges ahead, there was an emphasis on the importance of building strong business relationships and focusing on cash flow management to help clients navigate these times. In his presentation, “Better Communication, Stronger Relationships,” Vernon Roberts (Executive Coach, Extraordinary Communications) highlighted the importance of enhancing communication skills to build stronger relationships. He emphasized that strong relationships are built on the ability to ask thoughtful questions and answer challenging ones. He noted that empathetic communication and strategic questioning are crucial for fostering better relationships and effectively handling challenges. Scott Sartor’s (Founder/CEO, Croptell) “The Hero Ag Lender: Modern Cash Flow Education” and Anthony “Tony” Hotchkiss’s (Retired Ag Banking Executive) “Farm Financials: What Bankers Need Their Producers to Know” both stressed the importance of strong partnerships between bankers and producers, while underscoring the critical role of proper financial management. Sartor focused on leveraging technology and data to assist in the vital role that loan officers play in guiding farmers through financial challenges and supporting sustainable operations. Hotchkiss highlighted the importance of understanding farm financials, including key financial statements, cost of production, and the impact of capital expenditures, to ensure financial stability and growth.

In their presentation “Swift Signs in Agriculture,” Jessica Lehman (Managing Director, First Financial Bank) and Zach Allen (Senior Director, First Financial Bank) drew parallels between Taylor Swift song lyrics and stressed credit scenarios to highlight the importance of identifying red flags in character, financials, loan covenants, and agricultural cyclicality to manage troubled assets and limit bank risk. Jennifer Lurken (Partner, Gislason & Hunter, LLP) and Michael Dove’s (Gislason & Hunter, LLP) presentation, “Identifying and Protecting Against Hidden Liens and Lenders,” discussed understanding and managing various agricultural liens to protect financial interests and ensure priority in the event of debtor default or liquidation. Both presentations provided practical advice for agricultural bankers to mitigate risks and manage their portfolios effectively.

Organizational culture was also a key topic, highlighting its significance in shaping workplace environments and overall success. In “Building & Sustaining Strong Cultures in Banking,” Nate Franzen (President, Ag Banking, First Dakota National Bank), Lynn Paulson (SVP, Agribusiness Development, Bell Bank), and Alan Hoskins (President and National Sales Director, American Farm Mortgage and Financial Services) discussed the need for organizations to adapt to new challenges, understand cultural influences, address toxic elements, and maintain core values. Casey Merkwan’s (Community Market & Engagement Manager, Old National Bank) presentation, “Merging Bank Cultures for a Seamless Transition,” underscored the importance of understanding cultural differences, promoting transparency, and the role of leadership in ensuring effective communication and strong leadership during mergers.

This year’s keynote speakers brought a diverse array of experiences and insights, captivating the audience with their unique perspectives. In his 47th conference appearance, Dr. David Kohl, as

Dr. David Kohl

always, was able to keep the room engaged while discussing an agricultural industry outlook reminiscent of the 2013-2020 down cycle. Natalie Bartholomew, a seasoned banker and community president, is known for her advocacy for women in banking through her platform, The Girl Banker. John Wesley Boyd, Jr., a fourth-generation farmer and civil rights activist, founded the National Black Farmers Association. He shared his experiences working extensively with national and international leaders to fight the discrimination many black farmers have and continue to face. Craig Culver, co-founder of the Culver’s restaurant chain, shared his journey from a family-owned restaurant to a successful franchise with nearly 1000 locations. Retired Rear Admiral Scott Moore, with 30 years of experience as a SEAL leader, offered insights into leadership and tactical planning from his time leading elite military forces, which includes leading a mission later portrayed in the Tom Hanks film, Captain Phillips. Together, these speakers provided great knowledge and inspiration with their diverse leadership perspectives, and I strongly encourage readers to spend time learning more about each of their journeys.

I want to extend a sincere thank you to all our sponsors, exhibitors, and bankers from across North America (including our Canadian friends) who attended. I hope to see you all again next November at the 2025 ABA Agricultural Bankers Conference in St. Louis, MO. As always, it was wonderful to connect with our fellow Wisconsin bankers and I encourage all bankers interested in agriculture and agricultural banking to join us at the 2025 WBA Agricultural Bankers Conference, taking place on April 10-11, 2025 at the Kalahari Resort & Convention Center in Wisconsin Dells.

 

Hartmann is vice president – agricultural banking at BMO Bank, N.A. in Menomonee Falls. Hartmann also currently serves on the WBA Agricultural Bankers Section Board of Directors.

 

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From The Fields: Grain Harvest 2024

By Lance Lansing

As is done every year in September, planted and harvested acreage estimates for corn, cotton, and soybeans are reviewed based on all available data, including the latest certified acreage data from the Farm Service Agency. The USDA’s Supply/Demand Report on 9/12/2024, reported the outlook for harvest yields as “good” for our part of the country. USDA is estimating record yields in both corn and beans for southern Wisconsin and that will lead to even bigger increases in supply so we should expect to see lower prices for 2025. According to USDA data, production for corn increased by 39 million bushels to 15.186 billion. That is 30 million bushels above expectations. Record yields are projected at 183.6 bushels per acre vs. 183.1 bushels per acre predicted last month. Old Stocks are below expectations at 1.812 billion due to stronger exports and increased ethanol production. New stocks came in above expectations at 2.057 billion.

Bean production was trimmed by 3 million bushels to 4.586 billion which was 23 million below expectations. Record yields were left unchanged at 53.2 bushels per acre. Old stocks were cut 5 million bushels to 340 million in line with estimates. New crop stocks cut 10 million bushels to 550 million which is 34 million below expectation. Ending stocks were left unchanged at 828 million bushels.

As a result of the elevated yield expectations, working capital will probably be negative for most grain farmers in 2024. That could lead to increases in short-term operating loans. That could also mean a sharp decline in machinery purchases and capital improvements.

According to a recent survey done by Illinois FBFM, the cost of production for corn on owned ground hovered around $600/acre from 2015 to 2021 but has since jumped to $800/acre plus. When adding in cash rent that number increased to an all-time high of $1,182/acre in 2023. Projections are for only a slight reduction to input prices in 2025, leaving little room for the farmer to offset lower market prices. Improvements to input prices may come from anhydrous and nitrogen prices but Dap and Potash will likely remain steady. Diesel prices will be affected by who sits in office but has been trending lower. Cash rents should drop but landowners are going to be reluctant to follow through, especially those who owe money and are paying higher interest rates. The expected difference is only $25/acre.   Net income per acre hit a record high of $500/acre in 2022 and is estimated to be near zero or below for 2024 and 2025.

As bankers, we need to recognize that our grain producers are in a downward trend after 2-3 years of profitability. We can build value in our relationships by reminding our grain clients to get back to the basics. Make sure they know their cost of production. Encourage them to spend time on their financial statements and reporting. Control costs including inputs, land rents, capital purchases and family living. Debt per tillable acre has increased from $267 in 1992 to $809 today, and it is expected to continue to increase with the cost of land. Debt to asset ratios have dropped from 32% to 17% over the same time signifying that most of our landowners are 60 years old and older. This means that farm succession planning is more important than ever for our producers.

This is a time that our grain producers will need the support of their bankers. It will be our job to make sure they have the tools and knowledge needed to weather this downturn in profit. More communication will be needed to get through this to a more profitable time. We can bring value to the relationship with honest analysis, and hopefully the profitable times will return sooner rather than later.

Lansing is vice president – lending at Apple River State Bank in Darlington. Lansing also currently serves on the WBA Agricultural Bankers Section Board of Directors.

 

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From The Fields: Have a Plan

By Jenny Jereczek, Security Financial Bank, Durand

“If you fail to plan, you plan to fail.” A saying I am sure we are all familiar with and one that has come to mind frequently over the last few years. Planning is crucial to success. Think about the days we don’t plan, what happens? Often time is wasted as we spend time trying to decide what to do or we are easily distracted from the task at hand as we are not sure of our direction or purpose. An important part of the planning process is being intentional by defining the when and how. This will help to drive the action steps within the plan.

As the ag industry continues to experience volatile commodity prices and tight margins, it will be important for producers to have a plan. Each producer is likely to have a different plan with a different purpose whether it be marketing their grain, succession planning, transitioning from an enterprise, or maybe an exit strategy. No matter what the plan is, we as bankers have a role to play in the plan. We have the ability and tools to help the producer understand the financial implications of the plan and help them make decisions that will ensure success. By being a part of the planning process, we strengthen the relationship between the bank and our clients which serves to cement our position as trusted advisors.

Having a plan will help take the guess work out of emotional decisions, will help the team stay focused while increasing productivity and will drive execution. And probably one of the greatest benefits of having a plan is to reduce the stress load as having action plans clearly defined can help minimize uncertainty and prevent feelings of being overwhelmed.

Simple steps for creating a plan:

  • Define your goal in writing
  • Divide the goal into milestones
  • Identify the resources needed
  • Prioritize and assign tasks
  • Review and refine

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

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Classic Red Barn in a Corn Field
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From the Fields: A Legacy of Agricultural Excellence

By Nicholas Felder

As agricultural lenders in Wisconsin, we all play a crucial role in supporting the backbone of our state’s economy. Agriculture is not just a primary contributor; it is a way of life, deeply rooted in tradition yet constantly evolving to keep up with opportunities and threats.

As we all know Wisconsin’s agricultural sector is diverse, ranging from dairy farming to crop production to cattle and poultry and beyond. The state of Wisconsin is heralded for its dairy industry, leading the nation in cheese production and near the top in milk production. Additionally, Wisconsin farmers grow a variety of crops including corn, soybeans, cranberries, vegetables like potatoes and green beans, contributing significantly to the state’s economy.

However, like many agricultural regions across the country, farmers in Wisconsin have encountered numerous challenges in recent years. Fluctuating commodity prices, adverse weather conditions, increasing input and equipment costs, and regulatory pressures have strained cash flows for many operations. These challenges, compounded by global market dynamics and shift in consumer preferences, underscores the need for adaptive financial strategies and robust support from agricultural lenders.

As we navigate through 2024, uncertainty over the political landscape will be a point of discussion and possible contention around many dinner tables as we steam ahead into the fall Presidential election. This also includes discussion around the expired farm bill. The farm bill, typically renewed every five years to provide some stability and support to farmers across the country, is a cornerstone of U.S. agricultural policy. However, the expiration of the 2018 farm bill has left the agricultural community in limbo as we await congressional collaboration to pass a new bill or extend existing provisions.

This farm bill has, and will likely again, include provisions of: Income Support Programs, Conservation and Environmental Programs, Rural Development and Infrastructure; and Trade and Export Promotion. All of these provide support and opportunities for Wisconsin producers and rural economies to grow food, fiber, and fuel at affordable prices which are used locally, nationally, or exported for distribution worldwide.

In its absence, agricultural lenders here in Wisconsin should proactively engage with clients to assess risk exposure and explore strategies to mitigate market volatility. This should lead to conversations about cash flow management and repayment capabilities. We should be informed and ready to utilize the buffet of lending and treasury management options to put our producers in the best position to succeed as possible. We also need to stay informed of developments in the farm bill process and guide producers to resources as well as advocate for policies that support the long-term viability of agriculture in Wisconsin. Please engage with the WBA, local policymakers, and community leaders including engaged customers to voice concerns and influence policy outcomes.

Your role in navigating uncertainty is pivotal in supporting the resilience and prosperity of our farming communities. By staying informed, proactive, and adaptive in your approach to your clients can assist in mitigating risk, allow for capturing of opportunities, and foster sustainable growth amidst a historically challenging environment. As always, while the path forward may be uncertain, your commitment to serving the needs of Wisconsin producers and communities remains steadfast. Together, we can weather the storm and continue to uphold the legacy of agricultural excellence in our state.

Felder is vice president – commercial and agricultural banking at MidWestOne Bank in Lancaster. Felder also serves as Vice Chair on the 2024–2025 WBA Agricultural Bankers Section Board of Directors.

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From the Fields: A Look Back at the 2024 WBA Ag Bankers Conference

By Craig Rogan, Nicolet National Bank

As I reflect on the WBA Agricultural Bankers Conference held on April 11-12th with my fellow 108 bankers that attended, I am reminded of the expertise exhibited in Agriculture at this conference. It was refreshing to see some younger faces at this year’s conference as well.

My personal favorite speaker Eric Snodgrass did not disappoint with his knowledge of weather, although he reminded us that his prediction at the 2023 conference was inaccurate in the Midwest and specifically Wisconsin. Eric doesn’t believe the Midwest will be as dry as some are predicting. He stated he believes it will be dryer around harvest time in the Midwest and depending on when that occurs, will determine if it has an effect on yield.

Doug Johnson with Moody’s Analytics enlightened us on what’s swimming under the waves. He discussed staying size relevant as technology such as AI continue to make way into the Ag sector. He discussed the pros and cons of AI. An increased use of AI could produce an increase in job losses and privacy violations to name a couple of specific examples. The positives of AI could also allow for a progression in medical advancements and faster data analysis. Doug touched on Lab food and how farmers are more efficient at producing a sustainable supply of food compared to food grown in a lab. Doug is a strong advocate for Agriculture and shared “Since I can’t bring the City to the Farm, I’ll bring the Farm to the City.”

Mike North of Ever.Ag discussed the result of higher interest rates and the added cost of holding inventories. In regards to exports, Mexico has been able to keep up with a strong US dollar which has helped as the Chinese Yuan value declines.

Peggy Coffeen of Uplevel Dairy spoke with Pauly Paul of Complete Management Consulting LLC and gave us a glimpse into her Bi-weekly Agricultural podcast. Pauly went over several examples of farms that were in search of guidance to improve profitability on their farm. He discussed operation changes that were made to allow for profitability through reduction in labor, lower feed cost, increase production and expense modification.

Ed Elfmann of ABA spoke about the ACRE Act and how that impacts banks cost and could lower interest rates ½%. The approval of ACRE Act levels the playing field with Farm Credit by not being taxed on income derived from interest earned on real estate loans. He discussed the upcoming farm bill as it came due in Sept. of 23 with an extension to Sept. 24.  Farm debt continues to increase as well as the age of farmers which currently is 58.1 years old. He touched on the bird flu with milk production dropping 10 to 20% with cows affected by the bird flu. This drop in production has been approximately a 14-day cycle.

Lorenzo Cruz and Tyler Foti of WBA gave us a Wisconsin Legislature update and how the new district maps will affect Republican and Democratic representation in the house.

Thank you to our 16 exhibitors that help make this conference possible.

  • Ag Resource Management
  • Bankers’ Bank
  • Ever.ag
  • Farmer Mac
  • FHN Financial
  • FIPCO
  • Growers Edge
  • Hanson Auction Group
  • Michael Best & Friedrich LLP
  • Peoples Company
  • ProAg Bank
  • Purple Wave Auction
  • Steffes Group Inc.
  • USDA Farm Service Agency
  • USDA Rural Development
  • Wisconsin Farm Center

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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Farm Bill Advocacy

During both Wisconsin Bankers Association (WBA) Washington, D.C. trips this past spring, the Farm Bill was discussed as part of our policy agenda with our congressional delegation, including, notably Rep. Van Orden’s office since he is on the House Agriculture Committee. At the time, we shared that we were in support of the Farm Bill passing as most of the provisions are favorable; however, we did share concerns regarding potential language that would broaden Farm Credit’s authority. The legislation was not introduced until May 21 and at that time, WBA repeated its ongoing concerns with Farm Credit related provisions in the bill to Rep. Van Orden’s office ahead of its vote in the House Agriculture Committee. Very late Friday night, the bill (H.R. 8467) passed out of committee on a 33-21 bipartisan vote so it will now move to the House floor for consideration. It is anticipated that the House may not take up the floor vote until this Fall.

The Farm Bill as passed out of Committee contains largely positive provisions that WBA and the industry would support for the ag and banking sectors. However, it also includes provisions that WBA and the industry objected to around a broadening of Farm Credit’s powers and its compliance with current CFPB Section 1071 requirements. For example, the Farm Bill would move enforcement of Section 1071 from CFPB to the Farm Credit Administration and appears to only require collection of 3 data points – race, sex or ethnicity, provisions not extended to the rest of the banking industry. WBA will continue its advocacy against these provisions, including during our in-district meetings in August with the delegation, and encourages bankers to do the same with your respective member of the House. Again, it is anticipated that the House may not take up the bill for a floor vote until the Fall, and then it will move to the Senate where at least some of these expanded Farm Credit-related provisions are not expected to be supported. WBA will continue to keep the membership updated as actions occur on this important must-pass legislation.

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2023 Agricultural Banking Scholarship Awarded to Two UW Students

The Wisconsin Bankers Foundation, the non-profit arm of the Wisconsin Bankers Association, has awarded Chad Achenbach and Taylor Lindsay with the 2023 Agricultural Banking Scholarship. Demonstrating the Foundation’s commitment to cultivating the next generation of agricultural bankers in Wisconsin, the Agricultural Banking Scholarship is offered annually in the fall. Two $1,500 scholarships are awarded to students attending an accredited public or private, non-profit college, university, or technical college who demonstrate in their application a strong understanding of the importance of financial literacy and are actively pursuing a career in agricultural finance.

Pictured (left to right) are: Cassandra Krause, executive director, Wisconsin Bankers Foundation; Chad Achenbach, 2023 WBF Agricultural Banking Scholarship recipient; and Cody Kirschbaum, vice president – ag relationship manager, Peoples State Bank.

Chad Achenbach is a declared double major in agribusiness and animal science expected to graduate from UW–Platteville in May 2025. Active throughout the agricultural community, Achenbach grew up on a hobby farm in Eastman, Wis. and was involved with 4-H and FFA through high school. In 2020, Achenbach became an inaugural member of Wisconsin Department of Agriculture, Trade and Consumer Protection’s (DATCP) Wisconsin Agriculture Youth Council, where he gained insight on state agricultural policy development and tools available to support Wisconsin farmers. At UW–Platteville, Achenbach is involved in Alpha Gamma Rho (Beta Gamma chapter), Block & Bridle, and the Pioneer Dairy Club. He also serves as an ambassador for the UW–Platteville School of Agriculture. During the summer of 2023, Achenbach interned at Peoples State Bank in Prairie du Chien, Wis. as an ag loan officer.

Pictured (left to right) are: Michael DeLong, vice president – commercial/agriculture loan officer, Pillar Bank; Cassandra Krause, executive director, Wisconsin Bankers Foundation; Jenny Jereczek, director of agriculture banking & market president – Durand, Security Financial Bank; Taylor Lindsay, 2023 WBF Agricultural Banking Scholarship recipient; Dr. Brenda Boetel, professor and Agricultural Economics department chair, University of Wisconsin – River Falls; and Tony Betley, vice president – senior agricultural banking officer, Nicolet National Bank.

Taylor Lindsay is a declared agricultural business major and animal science minor expected to graduate from UW–River Falls in May 2025. Growing up on her family’s beef farm in Boyd, Wis., Lindsay has been around agriculture her entire life. Involved in 4-H and FFA throughout high school, Lindsay is pursuing an agribusiness career to not only remain active in the agricultural industry but also to help make a difference in her community. At UW–River Falls, Lindsay is a member of the Agricultural Business and Marketing Society, Agribusiness Leadership Team, Block and Bridle, Collegiate Farm Bureau, and Collegiate Livestock Judging Team. During the summer of 2023, Lindsay interned as an agriculture credit analyst at Nicolet National Bank in Eau Claire, Wis.

“In awarding the Agricultural Banking Scholarship to two deserving individuals, the Foundation aims to support and encourage the growth of talent in the agricultural finance sector,” said Foundation Chair Rose Oswald Poels. “I am pleased to recognize Chad and Taylor for their achievements and outstanding commitment to Wisconsin’s agricultural industry and wish them the very best in their future agribusiness careers.”

To learn more about the Wisconsin Bankers Foundation and its current scholarship opportunities, please visit wisbankfoundation.org.

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From the Fields: Choppy Waters Ahead for Row Crops in 2024

By Adam Sommer

Winter in Wisconsin is defined by many words, but rarely are the words crisp or comfortable one of them. February has brought some unseasonably warm weather to the state as we wrap up the month, and it has been quite crisp and comfortable. It has left us dreaming of spring. With spring comes one of the wonderful seasons of year on the farm. Crops are being sewn across the state, calves are being born, and the season brews new hope for the agricultural year to come.

However, 2024 looks like a year of some uncertainty across many agricultural fronts in Wisconsin. Interest rates have remained higher than recent memory, inputs are costly, and commodity prices have tumbled. Farmers are whispering of concerns for what the year ahead looks like, and choppy waters look like a near certainty.

So, what does this mean for our row crop operators? A year of tighter margins and pricing challenges is likely ahead. Barring global economic shifts, geopolitical forces upending the current pricing outlook, or a major weather event changing the current trajectory, farmers are preparing for prices that are down from a year ago. Below are two charts (one for corn and one for soybeans) using CME Group data on pricing for the March, September, and December corn contracts, and using the same data on pricing for the March, August, and November soybean contracts. This illustrates the trend we continue to see for both old crop and new crop pricing in 2024.

Even as the trend points down for crop pricing, many farmers here in the state of Wisconsin will reference a dry 2023 crop year and the hope for a spring bump in price. Anecdotally, there is still a large amount of grain stored in bins across Wisconsin. This unpriced crop could be troubling for the income statements of farmers, in some cases, against borrowed funds. The concern is that even as the year was dry, production remained at a strong, although not bin-busting, level. What that can mean going forward is that production across the United States could be at record levels given good growing conditions, should that occur in 2024. Much of what is driving these future markets is the anticipation of this higher production level and challenges on the trading front with a strong U.S. dollar to boot. Ending stock projections for corn could reach one of the highest levels since the late 1980s should projections ring true. With that concern in mind, it prompts the question as to how the farmer and banker can respond?

In our world, this means that conversations with farmers early in 2024 are all that more important as expectations are set for the coming crop year. Conversations should address the needs of the producer, alternative strategies for shortfalls, and plans regarding insurance coverage and marketing strategies. Not all that different than the annual conversations, but with more depth around the downside risk. Anticipating corn prices with a three or four leading the way hasn’t been a consistent concern over the last few years. Doing so will harken back a few years and with inputs elevated it leaves some concern.

In conclusion, some of the best steps row crop farmers and ag bankers can take are steps of preparation and communication. Farmers are a resilient bunch who have weathered the ups and downs of the rolling commodity cycles. Preparation and awareness will help each of them in this cycle as well. And the hope is that this is all premature speculation. The hope is that farmers in Wisconsin have a bumper crop, with international partners buying more, and a prosperous year ahead. We wish all the farmers the best as they tackle this next crop season.

Sommer is assistant vice president – ag and commercial loan officer at Bank of Brodhead. Sommer also currently serves on the WBA Agricultural Bankers Section Board of Directors.

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