FSA ag loans: not just for adults. Federal “youth loans” intended for 10-20 year olds

PORTLAND, ND – Meet Parker Strand – Cattle Woman.

At age 11, young Strand borrowed the maximum of $ 5,000 last December from a farm service agency’s youth loan program and bought five raised cows. She put her animals on her father’s cow-calf farm north of Portland and now she’s in business on her own.

“We raised 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 over a period of seven years and maybe turn a profit. Like adult cattle ranchers, it’s not easy to know how many, but she will find out later.

Strand grew up in an idyllic rural setting on the farm where his ancestors lived in the late 1800s. His father, Jeremy, is a financial advisor with an office in Mayville, but cultivates nearby.

Parker Strand, 11, of Portland, ND, enjoys the feeding chores of raising chickens, sheep, pigs and now cattle, but a Farm Service Agency youth loan program helps him learn the financial chores of cattle ranching. Photo taken June 25, 2018 (Forum News Service / Agweek / Mikkel Pates)

The children helped take care of the family’s chickens, sheep and pigs, and now they are becoming cattle. Parker says she hopes cattle have a long-term place in her life.

“I really like animals, just having them,” Parker says. She thinks some of her friends are having fun coming to the farm and petting them, including the two named calves – Lulabell, a cow raised from a bottle calf and the new mother of a calf, ” Tinker Bell”.

$ 5,000, 5 cows

Jeremy discovered the FSA Youth Loan Program when he applied for his own FSA loan to build a barn. FSA officials handed him a brochure and soon he helped his eldest daughter Parker apply and for the program,

Youth loans are aimed at young people aged 10 to 20. The main difference between loans for young people and those for adults is that most loans for young people do not require a co-signer, says Debra Schlief, a trainee farm loan officer at the Traill County office in Hillsboro, who oversees also the administration of FSA loans in Steele and Griggs counties. The borrowers themselves are personally responsible for the repayment of the loan, but the parents or legal guardians must agree to it. The program requires a recommendation from a project advisor – often from 4-H, FFA, or tribal youth organizations. Parker is a member of the Town & Country Pals 4-H Club, of which his younger sister, Paetyn, 9, is also a member.

Parker Strand, 11, of Portland, ND, borrowed $ 5,000 from a Farm Service Agency youth loan program to buy five cows. To the right are Debra Schlief, loan intern, of the FSA’s office in Hillsboro, and Parker’s father, Jeremy Strand, whose ancestors lived here in the late 1800s. Photo taken June 25, 2018. (Forum News Service / Agweek / Mikkel Pates)

North Dakota has about 141 young borrowers in the program statewide with average outstanding balances of $ 3,300. The state’s FSA added 31 borrowers during the current fiscal year, for an average of about $ 4,500 each. South Dakota has 390 borrowers with an outstanding balance of $ 3,168 and has added 92 so far this year, for an average of $ 4,120. Minnesota has 218 young borrowers with an average of $ 2,852 and made 50 new loans in the current fiscal year for an average of $ 3,672. Figures for Montana were not immediately available.

LaDonna Hupp, FSA’s farm loan officer in South Dakota, calls the youth program “a long-standing program for us and one to work with is fun.” She says it spanned her entire 35-year career with the FSA and its predecessor, the Agricultural Stabilization and Conservation Service.

Growth opportunity

Debra Schlief and Louise Boeddeker

Schlief works with borrowers of all types – farm property loans and land loans, and works with Parker’s loan in the youth program. The money can be used to buy livestock, seeds, equipment and supplies, Schlief says, or to buy, rent or repair necessary tools and equipment.

“This is an opportunity to get them started in farming for someone who has that interest,” Schlief said. A big part of that is teaching the business side of farming, 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, making your books and all those other pieces of stuff that will be the subject of 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 buy purebred cattle and sheep, with loans repaid in up to seven years. As young people grow into adults, youth loans may have a repayment schedule that overlaps with the schedules of new direct adult loans.

The interest rate is determined based on the cost of money to the federal government. Once determined, the interest rate on the loan does not change. The annual interest rate on the loan was 3.625% until June and rises to 3,875 in July, said Louise Boeddeker, FSA farm lending manager for Traill County.

Boeddeker says the total amount for the youth program is capped by state, but can be reallocated at year-end or moved between programs. The loan is secured by – in addition to promissory notes – by product liens made for sale on movable property, including livestock, equipment and fixtures purchased with loan funds.

Those interested in applying can contact the local FSA offices or see details at www.fsa.usda.gov/farmloans.