Working Hard to Make it Work

DairyIndustry-Blog

Burfeind Dairy employees (l-r): Alfredo Figueroa, Grace Figueroa, Bo Dankers, David Burfeind, Sheila Burfeind, Peter Burfeind holding Brooks Burfeind and Patti Robertson of Merchants Bank.

Those who have paid attention to the dairy industry know it’s been a roller coaster for farmers, with the ride hitting some lows over the past several years, and continuing to be challenging for many farmers.

In 2014, milk prices were at record highs, and things were relatively good for dairy farmers. In September of 2014, prices peaked at $25.70 per hundredweight (100 pounds) for milk, on the average nationally. Over the past three years, prices have been lower and they have bottomed out at $15.30 per hundredweight in February of this year.

Another indicator of challenging times was at the monthly dairy sale in early May in Pipestone, Minnesota, where the going price of “springers” – cows about to give birth – averaged $1,332, the lowest price since November of 2011. The overall size of the dairy herd was also down by 4,000 cows in Minnesota, according to the Milk Producers Council newsletter.

This has made every move count for dairy farmers.

“Unless you are in a niche market, it can be challenging,” said Goodhue dairy farmer Peter Burfeind.

Making a Go of It In Organics

One person who is in a niche market is Merchants Bank Commercial Banker, Kim O’Reilly, who with her husband, Casey, operates an organic dairy farm where they milk about 100 cows.

She said that back in 2014 and 2015 the cooperative they were working with needed more milk, so they were asked to produce more milk.

“But, it takes time to increase production as it doesn’t occur overnight,” Kim said. “So we have worked to get our production up, and now they have placed a quota limiting the milk the cooperative will take at the current price and are paying less than cost for the amount over quota.”

The Future is Brighter

Overall milk production is starting to slow down lessening the supply in the marketplace, and that means that the prices have started to tick up, Peter said. That sentiment was echoed by dairy expert Dr. Bob Cropp, of the University of Wisconsin-Extension, as noted in the May 25, 2018, Wisconsin Ag Connection newsletter. Cropp said that milk production needs to slow down if prices are going to gain traction again.

Peter, who milks 300 cows at the family operation which started in 1965, said the slowing of production should mean better prices six months from now, and he is hopeful that the smaller producers can stay around to enjoy that benefit, “but we really don’t know for sure where the industry is going.”

Cropp was in agreement in his May 25 column, saying: “Milk prices are expected to strengthen and possibly top out in October or November.”

It’s Nothing New

For many farmers, farming is part of their family history and it gets in their blood. Over the years, they have been through the ups and downs of the economic cycles. They remain resilient and optimistic.

“Farmers work hard day in and day out, but I truly believe it is a great life and a true blessing to be a farmer,” Kim said.

A Part of Merchants Bank Too

O’Reilly pointed out that experience with farming is something that she thinks sets Merchants apart from the other financial institutions working in the Ag sector.

In addition to O’Reilly, who is based in Cannon Falls and Red Wing, Senior Lender Brian Hokanson is also a farmer and also based in Cannon Falls and Red Wing. Lenders like Patti Robertson, who is based in Red Wing and works with the Burfeinds, has decades of experience in Ag, as does Jim Peterson in Cannon Falls.

Jim Allen, Tim Gossman and Blake Koebke help farmers in St. Charles. Matt Schuldt in Caledonia and Spring Grove and Ken Graner in Rushford and Lanesboro have years of experience working with farmers. Dustin Hundt and Senior Lender Shawn Sackman work with farmers out of the Onalaska location. Our Winona location includes Jim Vrchota and Senior Lender Randy Domeyer. Recent additions, like Jerad Brown in Rushford and Kaleb Storm in Winona, who grew up on the family farm and also has experience with helping vineyards, make up our Ag team.

Here’s more on what Merchants Bank’s ag financing and the lenders who may be able to help.

Kaleb Storm Joins Merchants Bank as a Commercial and Ag Banker

Kaleb Storm

Kaleb Storm has joined Merchants Bank as a Commercial and Ag Banker, according to Randy Domeyer, Senior Vice President and Commercial Banking Manager for Merchants in Winona.

“Kaleb’s experience in commercial and ag lending will be a benefit to his customers and add strength to our team here at Merchants,” Domeyer said.

Storm brings industry experience in banking as a Commercial and Ag Banker, as well as a credit analyst, from Unity Bank, working both in Wisconsin and Minnesota. He has experience in both SBA (Small Business Administration) and FSA (Farm Service Agency) loans.

Storm also brings practical experience in agriculture, which will help him understand the needs of his customers first-hand. He worked on the family farm near Westby growing up and looks forward to continue helping family in the St. Charles and Dover area. He has also worked as a Vineyard Manager, again near Westby.

“I understand what’s important in making a good loan, and I understand and appreciate the value of hard work,” Storm said. “The values that I have are consistent with Merchants’ values, and that was important in my decision to join this organization.”

Storm has a degree in Business Administration/Business Finance from the University of Wisconsin-Eau Claire.

“I look forward to getting to know the area and the people who make this a special place,” Storm said.

Merchants Bank has 21 locations, including its locations in Winona, Goodview and other Minnesota locations in St. Charles, Rochester, Rushford, Lanesboro, Caledonia, La Crescent, Spring Grove, Cannon Falls, Red Wing, Hampton, and the southern Twin Cities metropolitan suburbs of Apple Valley, Cottage Grove, Hastings, Lakeville and Rosemount. Merchants has Wisconsin locations in Eau Claire and Onalaska. Loans are subject to approval. Twin Cities-based Merchants Bank Equipment Finance is also a division of Merchants Bank, N.A.

Jerad Brown Has Joined Merchants Bank in Rushford and Lanesboro as a Commercial and Ag Banker

BrownJerad

Jerad Brown, Commercial & Ag Banker

Area native Jerad Brown has joined Merchants Bank in Rushford and Lanesboro as a Commercial and Ag Banker, according to Ken Graner, President for Merchants Bank in Rushford and Lanesboro.

“Jerad has the right mix of experience, interest and personality to be successful as a banker and, more importantly, to help our customers grow,” Graner said. “His work in credit analysis and his interest and experience in business and ag will be a benefit to the people he serves.”

For the past two years, Brown has worked with Rushford State Bank as a credit analyst, looking at agriculture and commercial loans, including an emphasis on the Farm Service Agency (FSA) guaranty program. A graduate of Rushford-Peterson High School and South Dakota State University, he served as a member of the South Dakota State University Livestock Judging Team. At SDSU, Brown majored in Agriculture Science and had minors in Animal Science and Agriculture Business.

“The people who live here are my neighbors. I know what’s important to them, and I know how important it is for our local economy for our farms and businesses to succeed,” Brown said. “I look forward to putting my knowledge and energy to work for Merchants Bank and our customers.”

Commercial, Ag and SBA Lending Trends

The economy continues to improve. One indicator we look at in banking is the increase in our lending portfolio.

GraphOur lending portfolio continues to grow at Merchants Bank.

  • Overall our lending portfolio has increased 15.7% through the first three quarter of 2014 compared to the first three quarters of 2013, where we had a very strong year compared to many other financial institutions.
  • Commercial lending increased 16.3% across all of our locations.
  • Ag lending has increased 12.9% and SBA lending has increased 16.3%.

The increase shows our expertise in and commitment to growing these important segments to help make the places we live better.

Contact a Business Banker today to learn more about business financing and leasing options at Merchants Bank. Subject to credit approval.