FSA ag loans not just for big people: Federal 'youth loans' geared to 10-20 year-olds
PORTLAND, N.D. — Meet Parker Strand — cattle woman.
At age 11, young Strand borrowed the maximum of $5,000 last December in a Farm Service Agency Youth Loan program and bought five bred cows. She put her animals with her father's cow-calf operation north of Portland and now she's in business for herself.
"We bred them and three of them had babies and two of them haven't had theirs yet," Parker says. She says she hopes to pay off the loan in the seven-year period, and perhaps make some profit. Like grown-up cattle raisers, it's not easy to figure out how much, but she'll know more later.
Strand is growing up in an idyllic rural setting on the farmstead where her ancestors homesteaded the late 1800s. Her father, Jeremy, is a financial adviser with an office in Mayville, but farms on the side.
The kids have helped care for the family's chickens, sheep and pigs, and now they're growing into cattle. Parker says she hopes livestock will have a long-term place in her life.
"I really like animals, just having them," Parker says. She thinks some of her friends have fun coming out to the farm, petting them, including the two named calves — Lulabell, a cow raised from a bottle calf, and new mother to a calf, "Tinkerbell."
$5K, 5 cows
Jeremy stumbled into awareness of the FSA youth loan program when he was applying for his own FSA loan to build a cattle shed. FSA officials handed him a brochure and soon he was helping his oldest daughter, Parker, apply and for the program,
The youth loans are aimed at 10- to 20-year-olds. The chief difference between youth loans and those for grownups is that most of the youth loans don't require a cosignatory, says Debra Schlief, a farm loan officer trainee in the Traill County office at Hillsboro, which also supervises FSA loan administration in Steele and Griggs counties. The borrowers themselves are personally responsible for repaying the loan, but parents or legal guardians must consent to it. The program requires a recommendation from a project adviser — often from 4-H, FFA or tribal youth organizations. Parker is a member of the Town & Country Pals 4-H Club, where her younger sister, Paetyn, 9, also is a member.
North Dakota has about 141 youth borrowers in the program statewide with outstanding average balances of $3,300. The FSA in the state added 31 borrowers in the current fiscal year, averaging about $4,500 each. South Dakota has 390 borrowers with an outstanding balance of $3,168 and has added 92 so far this year, averaging $4,120. Minnesota has 218 youth loan borrowers with an average of $2,852 and have made 50 new loans in the current fiscal year averaging $3,672. Montana figures weren't immediately available.
LaDonna Hupp, the South Dakota FSA farm loan chief, calls the youth program "a long-standing program for us, and a fun one to work with." She says it's been around through her entire 35-year career with the FSA and its predecessor, the Agricultural Stabilization and Conservation Service.
Schlief works with borrowers of all types — farm ownership loans and land loans, and works with Parker's loan in the youth program. The money can be used to buy livestock, seed, equipment and supplies, Schlief says, or to buy, rent or repair needed tools and equipment.
"It's an opportunity to get them started in farming for somebody that has that interest," Schlief says. A big part of it is to teach about the business side of agriculture, which isn't necessarily the "fun stuff" that involves driving a tractor or working with an animal, she says. "It's about keeping good records, doing your bookwork and all these other pieces that come into a successful operation in the future."
The repayment schedule depends on the use. Most of the loans made for Traill, Griggs and Steele counties are livestock loans. Many will purchase some bred cattle and sheep, with the loans paid back in up to seven years. As youth grow into adults, youth loans can have a repayment schedule that overlaps with schedules under new, adult direct loans.
The interest rate is determined based on the cost of money to the federal government. Once determined, the loan interest rate does not change. The annual loan interest rate was 3.625 percent through the month of June, and goes to 3.875 in July, says Louise Boeddeker, Traill County FSA farm loan manager.
Boeddeker says the total dollars in the youth program ares capped per state but can be reallocated at the end of the fiscal year, or moved among programs. The loan is secured by — in addition to promissory notes — by liens on the products produced for sale on "chattel" property, including livestock, equipment and fixtures purchased with the loan funds.
People wanting to apply can contact local FSA offices or check out details at www.fsa.usda.gov/farmloans.