A Hand Up: Programs help youth get started in agriculture
The livestock industry is a capital intensive business. Seldom does any rancher leap headfirst into buying a sustainably-sized cattle herd; most are built over time. With a little hard work, research and creativity, young people can get a jump start on their own herd at an early age, and learn to become cattle managers as they grow with their own herds.
Project launch pads
Heifer projects are often the launching point of many young producers’ herds. 4-H, FFA, breed associations, and livestock shows create a venue for raising and showing a quality female year after year. Often times project heifers are loaned, bought or gifted from family. Some programs also offer scholarship heifers to qualified applicants to give them a hand up in ownership.
The NILE Merit Heifer program at the Northern International Livestock Exposition in Billings, Mont., is one such program. Applicants ages 12-16 can compete for one of 20-25 purebred heifers donated each year by regional ranchers. Applicants submit a personal essay, reference letters, and a 3-5 minute YouTube video.
Heifer winners are required to maintain records, submit monthly reports, have the heifer bred, and bring her back to show at the following NILE. Shelby Shaw of Worden, Mont., is the livestock manager and director of youth education for the NILE. She was also a heifer recipient in 2008, and still has her Merit Heifer in her herd today. Shaw says her cow is coming on 10 years old, and has not disappointed with the progeny she’s had year after year. “By being a recipient in the past and now being coordinator of the program, I feel like I’ve seen the program go full circle.”
Shaw says the program is designed to help youth get a start in the beef cattle business by awarding heifer calves to recipients based on merit, future goals and ability to care for the animal.
The Cattlemen’s Family Legacy Heifer Scholarship is a similar program sponsored by the Western Junior Livestock Show and the Central States Fair Foundation. A cattle producer at the Black Hills Stock Show in Rapid City, South Dakota donates a heifer and a recipient is chosen from a pool of applicants through an application and interview process. Similar to the NILE program, the recipient is asked to bring the heifer back to show in the Western Junior Livestock Show futurity the next year, and must submit routine reports and train the heifer.
Nebraska College of Technical Agriculture in Curtis offers a heifer donation program to junior college students. The NCTA Heifer Link program launched in January 2015, as a supplement to the college’s noted 100 Beef Cow Ownership Advantage. Through Heifer Link, students have the opportunity to be assigned a breeding heifer during their fourth semester and leave campus with a bred heifer upon graduation.
“This innovative program requiring student management, hands-on sweat equity, a sound business plan and commitment to the Nebraska cattle industry allows the student to get a jump start into the cattle business,” says Dr. Douglas Smith, division chair and assistant professor of animal science and agricultural education at NCTA. “Students are able to become owner of a heifer to call their own and begin their herd.”
To be awarded a heifer, students must be enrolled in the NCTA 100 Beef Cow Ownership Advantage program and go through a rigorous interview process. Heifers are donated either by contributions of $2,000 to the Nebraska Foundation, with the heifer coming from the NCTA cowherd, or as live donations that must meet certain criteria from sponsoring cattle breeders.
A donated heifer might launch a dream, and also serve as great collateral. But continual herd building requires additional knowledge and most of all, financing.
Animal science and agribusiness management programs provide solid backgrounds for ranch management, but specialized programs, such as the 100 Beef Cow Ownership Advantage at NCTA, recognize the need for practical experience targeted at financing and managing a small cow herd.
The 100 Beef Cow program has been in existence for decades, long before the donation heifer aspect was added, with the goal of helping college students launch their own herd. Through the four-semester curriculum, which is an add-on option for ag majors, students receive training in lending.
“We want them to create a business plan, be prepared to get a loan, and be successful in the management of their cowherd,” says Smith, who oversees the 100 Beef Cow program. He brings in guest speakers such as bankers, lawyers and accountants to share real-world considerations with students. In the capstone course, students create an actual loan application package.
“Our goal is for students to be able to start their own 100 cow program – some are even funded before they graduate,” says Smith. Although students are not required to pursue ownership, and those that do are free to bank anywhere they choose, most obtain financing through their local USDA Farm Service Agency program with a Beginning Farmer and Rancher Loan.
Norm Bellows is a lending officer with FSA in Miles City, Montana, and has worked with many young farmers and ranchers.
FSA offers low-interest loans, currently at 2.25 percent and up to $300,000, on livestock purchases and operating lines. Bellows says the advantage of their program is they are able to lend to more high-risk applicants who don’t have a credit history or strong collateral.
“FSA wants a 150 percent security margin if it’s available, but we only have to have 100 percent,” he says. “A lot of people have a pickup and horse trailer – that’s all they have.”
He views his job as not only lending, but training and working with youth to create a successful plan.
“We are pretty detailed on cash flows, we want them pretty well put together so we know we’re going to have a successful operation” says Bellows. “By far we’re going to stress operational management too, to allow someone to move forward.”
His ultimate goal is to help producers successfully “graduate” from their beginning loan, and transition to bigger lending.
“We want to help them save their money and get in a position to work with a commercial lender down the road.”
Bellows says his job is very rewarding, as it offers him an opportunity to see youth or beginning ranchers build something successful and help educate them in the process.
“If the projection they put together doesn’t work, we try to point out alternatives, or opportunities of something different. We can’t expect our borrowers to come in here and be master’s level finance gurus.”
Bellows adds that although his borrowers are considered higher risk and operate with tighter cash margins and lower collateral than commercial lenders, FSA’s delinquency rate and losses are much lower than commercial bankers. FSA also offers loan servicing to help during tough times.
“We’re not just here to get people in the business, we’re there to keep them in the business,” he says.
Although it may seem like an end goal, purchasing cattle is really just the start of the work. Decisions such as nutrition, health care, breeding, financial planning and tax accounting require continual management and learning. Resources such as Extension, state and national trade association, lending institutions, conferences, or online classes offer additional outlets for education.
Starting a herd “opens the doors to ownership and gives [young producers] an opportunity,” says Smith. “It really comes back to helping each other and paying it forward.”