Posted: 05.25.2010

The Wisconsin Farm Report surveyed three different ag lenders in different areas of the state on Monday and found one thing out - they agree, the state's still struggling.

Pam Jahnke visited with Julie Wuthrich, current president of the Wisconsin Ag Bankers and a lender herself for Citizens Bank in Amherst.  The most recent survey of District 7 ag lenders showed Wisconsin's farmland values were going down.  Wuthrich said she couldn't disagree, "but there's not been much farmland sold either," she said.  "We've seen the value of land used for hunting and recreation decrease in value, and land that may be located for commercial development go down - but true farmland, there's just not much that's been sold."

Wuthrich told Jahnke the big concern she's heard from many ag lenders is the amount of paperwork and time it takes to process loans.  "Each loan is unique, and requires special consideration - and we as ag lenders are getting asked a lot of questions by our superiors.  Everything is under scrutiny."

Listen to Julie Wuthrich's conversation with Pam Jahnke.

Amber Bennett, Senior VP of Credit Delivery for Badgerland Financial, said that they've seen plenty of new applicants looking for financing through Badgerland.  "Some, there previous lender has just decided to get out of agricultural lending, so these farmers have to start looking elsewhere."  Bennett told Jahnke, "The problem is that for many of them - their lender should have sat them down and had a long conversation with them about their positions and options long before now.  These are tough conversations to have."  Bennett said that they're also dealing with in-house staff morale!  "We're all so passionate about this industry - and the greatest feeling is when you're clients are doing well, but we have to ask for a lot more information now then we may have before ."

Listen to Amber Bennett and Pam here.

Rene Johnson, also on the board for the Wisconsin Ag Bankers and an ag lender for M&I Bank in Janesville, said farmland values have been holding in her area.  She said that ag lenders today need to see a growers plan before they can get very far in financing.  "We finance the future - and we've got to see the specific plan on how we're going to get there."

Listen to Rene Johnson and Pam here.

All three lenders also mentioned that they expect increased regulation if reforms are passed in Washington, D.C. - only compounding the paperwork on their end.  There was also unanimous concern that Wisconsin "may not be out of the woods yet".  A big corn crop and declining commodity prices put in jeopardy growers that are still paying high cash rents.  Outside markets can influence not only daily commodity prices but also inflation factors, and dairy is not responding the way earlier charts had expected - according to the three.

The upside - credit IS still very available and interest rates are still low.  All three also pointed back to the devastating 80's when inflation - poor equity positions - and high interest rates tore farms apart.  They said todays grower is generally in a better position then they would've been then.

« back to news articles