By Blake Jackson
Agricultural bankers in Wisconsin and surrounding states are expressing concern about farm profitability as 2025 comes to a close. Surveys conducted by the Federal Reserve Banks of Minneapolis and Chicago show tighter farm credit conditions in the third quarter, with lenders reporting slower loan repayment rates and higher demand for extensions and new loans.
Despite expectations for a strong corn and soybean harvest this fall, bankers anticipate these trends to continue into the final quarter of the year. Over 80 percent of respondents in one survey predicted that farm income will be lower than it was a year ago.
Joe Mahon, regional outreach director for the Federal Reserve Bank of Minneapolis, said during a webinar on the survey data that declining crop prices are putting pressure on farm incomes.
“We’re seeing, overall, the market conditions are sort of dominating,” Mahon said. “Strong production should offset some of (the lower prices), so that’s good news to farmers. But we’re not necessarily seeing that balance out in terms of higher income because prices are so low.”
Rene Johnson, senior vice president of agricultural lending at Lake Ridge Bank, told WPR that farmers in southern Wisconsin are waiting to see how harvest results affect their balance sheets. Those who secured profitable sales early or found cost savings on fertilizer and other inputs are in better positions, she said.
“The profit margin is tighter than it has been in a long time,” Johnson said.
She added that slower repayments or loan renewals don’t indicate that farms are unable to pay their bills. Many producers are managing cash conservatively, making minimum payments, or finding creative ways to add income, such as offering trucking services or finishing beef cattle.
“They are being very creative and adding things that they can add easily to their farm without a lot of investment,” Johnson said. “They’re also looking at non-productive assets that maybe they could sell to generate cash.”
While nearly half of surveyed bankers predict an increase in forced sales or liquidations of farm assets in the next three to six months, farmland values in Wisconsin have largely held steady, providing farmers with equity to manage challenges.
“There is still farmland selling, and there’s still qualified buyers out there who are able to buy it,” Johnson said.
Photo Credit: istock-alenamozhjer
Categories: Wisconsin, Government & Policy