Hi I’m Mike.
3 years ago we began a series titled how to become a rancher.
The first three episodes of that series covered what to expect, what kind of rancher you can
be and where you would like to have the ranch of your dreams.
Unfortunately, Covid hit and stopped us short, but now I am glad to say that we are finally
going to give you the final video in that series.
It’s been 3 years in the making but now I am happy to bring you…
{intro} For years I have received emails asking how
do I become a rancher?
Some of those I have been able to answer, but for most, it’s a very difficult and
daunting question.
A website called Career Explorer when asked that very question, gives this answer:
Although a degree is not required to be a rancher, some ranchers do complete a degree
in agriculture (ranch management) or a similar field.
Instead of earning a degree, an aspiring rancher could be an apprentice to an experienced rancher
in order to learn the skills necessary.
This takes between one to two years and is a hands-on, on-the-job intensive type of training.
Many experienced ranchers love to pass their skills on to the next generation.
And here are some skills necessary in order to become a rancher according to Career Explorer:
some relevant experience is typically preferred for entry-level positions
a good business and management sense is needed in order for the ranch to become a profitable
business some repair and maintenance skills are necessary
in order to keep equipment and structures in good working order
some veterinary skills are necessary in order to maintain the health of the herd
and finally, planning skills are key, as a ranch can be rife with unexpected obstacles
I’m not going to argue with any of that, but I truly believe that ranching isn’t
just a career, it’s a calling.
Its late nights with no sleep trying to keep a calf alive, its hard work, sore muscles,
and fights with your husband or wife.
Its money flying out the window, and trying to come up with ways to bring more in.
Its side hustles and trades.
Its dealing with a neighbor that you have no choice but to share a fenceline with and
its rarely if ever easy.
I don’t know a single ranch in the world that is run in solitude with just one person.
You rely on customers, buyers, friends, neighbors and of course family to get this done.
In fact, you have to build a team around yourself.
Ranching is hard enough and without help, you probably won’t succeed.
There are going to be times when you have to come up with the answer to a problem on
the fly, those unexpective obstacles but my suggestion is to stop and breathe, and ask
for help because you will find it.
Todays video is about financing your ranch, but its also about our story.
Because just a few weeks ago we purchased a portion of the very ranch we have been on
for the last 15 years, adding to our name and to our own little ranch.
Every farm and ranch in this country handles generational change differently, what follows
in this video is what has happened with our family and what is helping us build a future
for the ranch.
Since January of 2022 we knew we had to buy a portion of the ranch and we needed to do
it pretty quickly.
Erin’s mom is no longer in the cattle business, we have an opportunity to buy a part of the
ranch.
So began our journey in finding our own financing and buying a land in Northeast Wyoming.
We knew what the asking price per acre was and I think that’s a starting point that
most people will begin at.
Once you know the total financing you will need, you can start the process of looking
for someway to pay for it.
But as we found out it wasn’t easy.
The first stop we made was the USDA at farmers.gov.
So the USDA offers a lot of help to farmers, ranchers, and foresters to get loans they
need.
A Farm Ownership Loan can be used to purchase or expand a farm or ranch, and they offer
up to $600,000 for eligible borrowers and if you are first-time farmer, this may be
the right option for you.
Beginning farmers and ranchers with less than ten years of experience can get started with
one of these loans through the USDA’s Farm Service Agency for FSA.
They aren’t just giving away money, and you will have to show a business model or
plan and you have to come up with a down payment of 5% of the purchase price.
FSA can also guarantee up to 95 percent of a loan if its obtained from a commercial lender.
Its easy to find out more information about FSA loans, all you have to do is find your
local FSA office at farmers.gov.
While FSA was our first stop, we quickly found out that we didn’t qualify for the beginning
farmers and ranchers loans.
See, we had been on the ranch for 14 years and to them, it no long made us beginners
although we could still maybe use Farm Service Agency to help us guarantee a commercial loan,
so that’s where we went next.
There’s a saying: When you try something, you risk failure, but if you don’t try,
you ensure it.
I don’t know who said that but I should get it tattooed on the inside of my eyelids.
So many times in life we know what we want to do but we just don’t do it.
It was like that for me as we started looking at commercial banks for a loan.
On our ranch we make money in non traditional ways.
We have Youtube, which will make anyone pause when you mention that you get paid for posting
online, but more importantly we had just decided to throw the traditional way that our ranch
had operated for over 100 years, out the window.
The cow calf operation was now done on the ranch, and we had dedicated ourselves to providing
our beef, pork and other products direct to consumer through our farm store and online
sales.
Timing could have been better, for example, if we had a 5 year track record under our
belt, we might have been able to convince the gate keepers at commercial banks that
we had a viable business plan.
Unfortunately, old school still rules in some degree and we were forced to talk about stocking
rate and selling our steers to feedlots when we had a feedlot of our own.
We had to talk about calf prices, when we never again planned on selling calves at auction.
Luckily for us we had a loan officer who was young and understood what we were doing.
She had faith in us and that felt so good, but after months of not knowing, we were turned
down for a loan.
That’s the other thing about this process no one talks about.
Nothing happens fast.
Everything moves at the speed of dark and while its frustrating, you have to realize
there are a lot of moving parts.
Here’s the basic 1,2,3 of getting a land loan.
1.
Find the land and determine the price you will buy it for
2.
Find a lender and get approved for the loan (that’s the hard part)
3.
Survey of the land to show what you are buying and file it with your county
4.
Get an appraisal done and make sure you aren’t paying too much for the loan
5.
Hopefully close the loan And there could be other hiccups thrown in
there as well.
Water studies, wildlife and environmental issues, utilities, zoning restrictions, what
I am saying is that you have to be prepared for a process and unless you have cash money,
you are going to be waiting for a while.
So after waiting for months, Erin and I found out that we were not going to be able to get
a commercial loan, even with FSA guarantees.
We were stuck between a rock and a hard place.
We had too many year experience on the ranch to be considered beginning farmers and we
didn’t have enough experience for a commercial bank to believe we knew what we were doing
and could make money doing it.
I kinda wanted to quit and I felt like we caught in a catch 22, damned if you do, damned
if you don’t.
But we had to stop, and breathe and ask for help.
If you have been with the channel for a while, you’ve probably heard of FBN, farmers business
network.
Since 2020, when FBN launched their livestock division we have been happy to have called
FBN a sponsor of Our Wyoming Life.
Our job has been to get the word out about FBNs livestock division and one of the founders
of FBN just happened to be Our Wyoming Life fan and gave us the opportunity to do just
that.
Fast forward to the middle of 2022 and my little mental breakdown about the future of
the ranch and I am on the phone with Charles from FBN and we chat about what’s happening,
its then that he tells me that FBN has a finance division as well and I should give them a
call, explain our situation and see what they can do.
So we called.
And we find a whole new type of lender.
FBN has farm land loans, where you can get new loans or refinance your existing loan
and they pride themselves in helping family farmers extend their operations in to the
generation.
Well this sounds like its right up our alley.
Not only do they have land loans, they have operating loans, input financing
and equipment loans available as well.
And here’s how it worked: The application process began online, it took
only minutes.
We had a dedicated advisor to help us through the process, we uploaded our documents and
soon we had a decision.
Survey and appraisal were the steps that had us waiting now as they were completed by local
companies that had to schedule us in.
Once that was done, we were able to lock in our interest rate and on January 27th, we
closed on our loan.
This is where FBN surprised me and honestly blew me away by offering a program like no
other.
FBN has investors, investors that want to ensure that farming and ranching continues
and that family farms thrive.
Those investors make a program available like no other, called Farmland Capital.
Farmland Capital provides money today for a share of your farms or ranches future and
can account for up to 25% of your farms value, great part is, there is no interest payment,
in fact there is no payment unless you sell your ranch, and you can choose, down the road
to pay it back.
Investors chose to invest alongside you, the farmer or rancher.
They know that farming and ranching is a capital-intensive business with razor thin margins and they
also know that banks will typically only lend 60% of a farms value, leaving the gap up to
you.
Farmland Capital is there to help fill that gap.
This is an amazing product, its only offered by FBN and we were so lucky to have it available.
With Farmland Capital, our loan is more manageable and not only that but we feel we truly have
a partner with FBN as they are committed to our success.
That’s the great part, our loan officer at FBN, comes from a farming family, our credit
analyst, farmer, and our closing coordinator, farmer.
Thanks to them, I am standing on land we own and we have skin
in the game.
Financing your ranch is going to be a journey, just like ours was.
It took us over a year, but with the right people behind you it can happen faster.
Another thing that most people don’t think about is this: A ranch is a huge investment
and a huge undertaking.
Stress is inevitable, and different people deal with it in different ways.
I know that my wife, Erin, was stressed beyond max right up until the papers were signed,
then she breathed a sigh of relief.
For me, once the papers were signed, I now felt like there was a bounty on my head, and
the pressure to succeed is huge.
I’m just throwing that out there, cause its something worth thinking about, for your
sake.
Its not going to be easy, being a rancher, in many ways, just remember to stop and breathe
and ask for help, take a piece of advice from me though and start with FBN, it may just
save you a lot of trouble.
With this portion behind us, both Erin and I want to thank Erin’s Mom, Rita for this
opportunity and her patience through this last year and this entire process, and of
course FBN for giving us an option which we didn’t even know we had and helping us along
the way.
This is the long awaited end of our so you want to be a rancher series, but its not the
end of ranching.
If you want to keep learning about ranching and everything it entails, I would ask you
to subscribe, follow along as we explore the ranch life and escape the ordinary.
And thank you for allowing us to continue our journey, on our ranch, and Our Wyoming
life.