FORT RANSOM, N.D. – Programming at the first annual Livestock Summit included a panel discussing some of the help that is available in the areas of financing and meeting regulatory requirements, both of which are important aspects of starting a new or expanding an existing livestock operation. The following individuals took part in the panel discussion: Jim Leier, ag lender at the Bank of North Dakota; Jason Wirtz, ag development at the N.D. Department of Agriculture and Kyle Froslie, vice president of agri business and capital markets at AgCountry Farm Credit Services.
Bank of North Dakota – All of the programs offered by the Bank of North Dakota are participation programs, which means the customer first has to go to a lead-lender source, such as Farm Credit or a local bank or credit union. That entity is the contact for any loan and will get in contact with the Bank of North Dakota, Leier said, and from that contact it will be decided what programs will work for a particular situation.
He gave a brief summary of the programs available for livestock production at this time:
Ag PACE program – This program offers a $20,000 interest rate buydown, and there is no requirement to feed a by-product.
Bio-fuels PACE program – This offers a $250,000 interest rate buy-down,but the borrower must feed some dried distillers’ grain in the ration and this needs to be verified each year.
Both of the PACE programs can be used to upgrade facilities and begin with a new facility. What the interest buy-down does is it covers both the Bank of North Dakota portion of the loan and the lead-lenders portion of the loan. Usually these loans are done on a 50-50 basis, meaning that a $100,000 project will be funded with $50,000 from each party taking part in the loan.
Invest Program – This program is designed for people who are non-farmers and want to invest in a value-added cooperative, feedlot, swine facility or dairy operation. This also features a $20,000 interest buy-down.
AgCountry thoughts – This entity was started through an act of Congress about a 100 years ago and they can finance agriculture or things that help rural America, according to Froslie.
“We get pretty good at financing agriculture, because that is all we are allowed to do,” he said. “And that provides benefits to those who are looking for expertise in that area.”
Their financial assistance to farmers and ranchers includes loans, leases, tax records, insurance and succession and retirement plans.
Froslie encouraged producers to look at ways to add more diversification to their operation, since it can work as a tool when you are creating efficiencies in your operation. For instance, for a strictly grain farm, adding livestock can offer a way to utilize the labor more throughout the year, rather than just during the cropping season.
Livestock can also increase efficiencies through the use of manure to replace some of the fertilizer that needs to be purchased.
“We in North Dakota ship in a lot of fertilizer and ship out a lot of crop and that costs money and it comes out of your pockets,” Froslie said. “You create efficiencies by not paying that shipping by spreading manure on your fields, which means you don’t buy the fertilizer; feeding some of your crops through animals and having them to sell versus the dollar basis on corn. So that is another way you can create some sustainable efficiencies on your operation.
“The other piece of that is it is a hedge – wheat, soybeans and corn all basically move in the same direction where cattle may or may not, so you have a different revenue source which potentially has a higher value than the cost of production when maybe your crops are at a value lower than the cost production.”
For those wanting to get into a livestock operation for the first time, Froslie suggested they find someone who has a successful livestock enterprise and develop a mentor relationship with that person, so you don’t create the wheel all over again and you find how it works for someone else.
State Ag Department can assist with regulations – Wirtz has worked with the ag department for 18 years as a livestock development specialist and is associated with such programs as the Livestock Pollution Prevention Program, age and source verification and livestock dealers.
The Livestock Pollution Prevention Program is an aid to livestock producers across the state with technical planning assistance and also finding financial sources to correct environmental concerns. Some of the agencies Wirtz works with include: N.D. Stockmen’s Association, USDA’s NRCS, and the State Health Department, as well as private engineers and lenders.
The permitting process for a livestock operation will usually require a manure management plan where such things as the land available for manure application, the crop rotation and how that manure is going to be handled needs to be known. Wirtz said his department can assist in putting a manure management program together that will meet the State Health Department requirements.
Wirtz also outlined the Section 319 program, which is a requirement of the Environmental Protection Agency (EPA). This can be a funding program and is coordinated through the EPA’s Region 8 office in Denver.
“At the Department of Agriculture, we act basically as a mediator between the regulators and the producer,” Wirtz said. “The NRCS also has funding for projects with their Environmental Quality Incentives Program (EQIP).”
All three of the panelists agreed there is ample assistance available in many areas to those looking to expand or upgrade their livestock operation, or to start a completely new one from scratch. Each of these three sources, plus many others can be the first contact for an expanded or new venture.