Ranch Loans

Farm Plus Financial offers ranch loans throughout the United States to expand your ranching operations. Ranch loans can be used to purchase new ranch equipment, expand your ranch or farm, purchase new cattle, ranch real estate or refinance your existing ranch loans and debts for a better rate and term. Contact a ranch loan representative at Farm Plus Financial today for current interest rates and information on ranch loans or to discuss how we can help you take your ranch to the next level. Call us toll-free at 866.929.5585 or contact us online with our easy contact form.

The information in the article below below will cover the following topics:

History of U.S. Ranching

Cattle RanchingRanching and livestock production is one of the oldest business endeavors in North America, dating back to the earliest European colonization of the continent. The word ranch and rancher are derivatives of the Spanish words rancho and ranchero. The terms’ use in early Spanish colonies in Texas and Florida indicated an establishment whose primary economic activity was livestock production and management on unimproved fields and pastures. It was Spanish explorers, missionaries, and conquistadors who brought livestock like cattle and horses with them to North America. In places like Florida, the first cattle herds were introduced in the 1500s and the first organized ranching operations began in the 1560s with the founding of St. Augustine, the oldest continuously occupied European settlement in North America.[4] Ranching in the U.S. Southwest had similar origins; in places like Texas and California, the first sustained ranches and ranching operations were introduced by Spanish colonizers. While Spanish colonial territory was held by the Spanish crown, throughout the seventeenth, eighteenth, and nineteenth centuries, the Spanish (and later Mexican) government created and distributed land grants to private citizens. The ranchos that sprung up across the Southwest were the result of these royal land grants, giving private citizens tracks of land and the right to graze and move livestock across them, with cattle trails snaking across the southwest to various locations in the Spanish colony of New Spain.[5]

The acquisition of California, Texas, and large parts of the Southwest by the United States did little to alter the basic form of ranching. Relatively primitive ranches built on largely undeveloped land served as the focal point of massive herds roaming unenclosed grazing land. As markets became saturated in the eastern parts of the country (and as land became increasingly developed), ranchers moved west, drawn to the open grazing land of federal territorial possessions. Cattle remained the primary focus of the ranching industry (with chicken production primarily confined to eggs laying hens rather than broiler hens). The end of the nineteenth century and the beginning of the twentieth century saw major changes in the ranching industry, as the expansion of the railroad, the growth of major corporations, the increased federal role in regulating the food supply, increases in technologies (the proliferation of refrigeration and the development of faster transportation networks, for example, allowed the growth of the broiler chicken industry), and the increased federal presence in the form of farm subsidies and farm supports (particularly during and after the Great Depression) allowed for the creation of more centralized, regulated, scientifically managed, agricultural businesses (which gradually took the place of unregulated, unsupervised ranching).[6]

Ranching, Livestock, and the U.S. Farm Economy

Cattle Ranching in New Mexico

The growth and corporatization of ranching and livestock production in the United States have made ranching and livestock production a vital part of the U.S. economy. The statistics on livestock and meat production alone demonstrate the enormously important role this industry plays in the larger economy. In 2007, the total number of livestock in the United States numbered more than 2.1 billion: 96 million cattle and calves, 67.8 million pigs and hogs, 5.8 million sheep and lambs, 1.6 billion broilers and meat chickens, and 349.7 million egg-laying hens. In 2010, the United States produced more than 26.4 billion pounds of beef, 22.4 billion pounds of pork, 171 million pounds of lamb and mutton, and 42.5 billion pounds of poultry (including broiler chickens, mature chickens, and turkey). Internationally, the United States is one of the largest meat consumers and producers, with the average American eating 270.7 pounds per person (seconded only by Luxembourg).[7]

In addition to the number of animals, the livestock industry represents an enormous part of the U.S. farm economy.  Beef sales last year generated more than $44 billion in farm receipts. In 2011 the pork industry created 35,000 direct, full-time jobs, 515,000 indirect jobs, and $21.8 billion in income from farm sales. In addition, the industry exported more than $6 billion of pork and pork products while adding $34.5 billion to the U.S. gross national product.  The chicken industry, having recently overtaken beef as the most consumed meat in the United States, also generates significant profits. In addition to creating 300,000 direct jobs and 200,000 indirect jobs, chicken sales generated $50 billion in receipts with American consumers spending more than $70 billion on chicken products. In addition to broiler chickens, the egg industry produced $7.8 billion in 2012 and 92 billion eggs.  Finally, out of $390 billion in total 2013 farm receipts, livestock accounted for $171.7 billion, more than 40 percent.[8]

The importance of livestock to the economic wellbeing of the United States is reflected in the reach of federal programs set up to aid ranchers. Since 1995, federal farm subsidies to ranchers and livestock producers have totaled more than $4 billion (with most peaks occurring during years of extreme weather).[9]  The USDA has a number of farm support programs available to ranchers in need of federal aid.  The Agriculture Act of 2014 made permanent a number of weather-related programs, including the Livestock Indemnity Program (which provides benefits to ranchers for excessive livestock deaths as a result of extreme or adverse weather: payments are up to 75 percent of the market value of the animal in question and livestock must be owned by the claimant on the day of the animal’s death), the Livestock Forage Disaster Program (which compensates ranchers who have suffered grazing losses due to drought or fire up to 60 percent of their monthly feed costs), and authorized the Emergency Assistance for Livestock, Honey Bees, and Farm-raised Fish Program (which covers livestock-related adverse weather losses not already covered by other farm programs).[10]  In addition to direct subsidies, the federal government allows ranchers access to 155 million acres of the 245 million acres of land administered by the Bureau of Land Management. In order to graze on federal land, ranchers pay a $1.35 fee (on that is significantly below market value per animal unit month (defined by the BLM as “the amount of forage needed to sustain one cow and her calf, one horse, or five sheep or goats for a month”). While these grazing rights have been gradually declining (droughts in the West have forced the BLM to limit grazing rights in order to maintain an ecological balance on federal land), ranchers who turn to private grazing lands often pay up to sixteen times more in grazing fees than they do on federal land.[11]

Ranch Loans, Livestock Loans and Resources

The importance of ranching to the U.S. economy means that farmers have a number of resources available to start or expand their ranching operations. The USDA and the Farm Service Agency are good options for beginning ranchers looking to get a start in the livestock industry.  Like beginning farmers, beginning ranchers who have not operated a ranch for more than 10 years and who do not own a ranch larger than 30 percent of their county of residency’s average farm size are eligible for a loan. Borrowers need to have a strong history of financial responsibility and must have participated in the operation of a farm for at least three years. Qualified ranchers can borrow up to $300,000 (or $35,000 in microloans).[12] In addition to beginning farmers, the USDA and FSA offer loans for socially disadvantaged, minority, and women ranchers. The application process is largely the same as for beginning farmers and ranchers, but borrowers must voluntarily disclose their racial, ethnic, or gender identity. Like beginning rancher loans, minority ranchers can borrow up to $300,000 (or $35,000 in microloans) which can be borrowed in the form of operation loans (which can buy livestock, feed, equipment, or refinance debt) or ownership loans (which can be used to buy land, contract or repair buildings and infrastructure, and make ranch improvements).[13] Farmers interested in these sorts of loans should contact their local FSA office.

Nevada Farm Loans

In addition to loans, ranchers can obtain insurance policies protecting the market value of their livestock. Since the USDA and FSA already protect ranchers in the case of adverse weather and unusual livestock death, federal insurance policies are designed to protect against a decline in market value of animals or animal products. The USDA’s Risk Management Agency offers ranchers livestock gross margin policies (which protect against the loss of gross margin: market value of livestock minus feed costs) and livestock risk protection (which protects against declining livestock prices). [14]

Finally, ranchers can obtain financial support through private companies like Farm Plus Financial. With federal agencies like the USDA and the FSA focusing their attention on aiding beginning farmers, Farm Plus seeks to offer financial assistance to midsized and established ranchers. Farm Plus commercial ranch loans must be secured with agricultural real estate and start at a minimum of $400,000 (significantly higher than the FSA’s maximum loan amount), requirements that inevitably weed out those just entering the profession.  For established farmers looking to expand their operations, we offer a wide variety of farm loan options (including conversion loans to help farmers convert short- or variable-term loans to fixed-term loans) that can help ranchers pay for livestock, equipment, and farm improvements and operations.[15] Ranchers interested in applying for Farm Plus loans should look at the options offered in each state.

While changing diets, changing demographics, and changing weather patterns (western drought pose a particular threat to livestock operations, especially for farmers reliant on access to federal grazing land) are offering new and unexpected challenges for the ranching and livestock industry, Farm Plus financial is committed to helping the agricultural community by providing financial support and information. Farmers and ranchers interested in doing business with a leader in the field of farm finance should feel free to contact us today.

Resources for Ranchers Seeking Ranch Loans