NLPA Sheep & Goat Fund Celebrates a Decade
An Innovative Source of
By Ross McSwain, NLPA Correspondent & Melissa Schneider
Colorado Springs, CO (Dec. 22, 2010) -- At a time when the American economy is soft and responding slowly to stimulus funds from the government, the National Livestock Producers Association’s Sheep and Goat Fund, now in its 11th year of operation, is proving that modest amounts of money from the U.S. treasury can be extremely beneficial to businesses across the nation.
The NLPA Sheep and Goat Fund made its first loan in September 2000. Since that time the fund has made more than $27 million in low-interest loans with flexible terms to producers to enhance operations that deal with sheep and goats and their products. Those loans have gone to 57 borrowers in 27 states, notes Scott Stuart, NLPA President and CEO.
“The Fund has been a positive force to help many businesses succeed,” said Stuart, pointing out that one of the fund’s success stories is illustrated by Cypress Grove Dairy in California.
“The Fund helped us with an expansion that made it possible for our dairy to enter a larger market,” said Mary Keehn with Cypress Grove Dairy, in Arcata, California. “Our award-winning cheeses are now available at Whole Foods nationwide. The Fund was available to our business at a critical time and we are grateful for that.”
According to Peter Orwick, Executive Director of the American Sheep Industry Association, the Fund helped improve the wool chain in the United States.
"The Sheep Venture Company appreciates the opportunity the loan fund provided in our initiative to have shrink proof wool processing available in America," he said. "This equipment we brought in from Italy in 2010 represents the first wool textile equipment imported to the United States in 20 years."
The NLPA Sheep & Goat Fund also helped the Utah Wool Marketing Association (UWMA) acquire a warehouse space that benefits wool growers from six Northwestern states according to Will Griggs, UWMA Manager.
“I think the (loan) fund is great and it is being used for its intentions. Above all, it has allowed a local marketing warehouse to stay in the area,” Griggs said. “It not only helped us with the new warehouse, but it also allowed the Association to streamline its finances to conduct business more efficiently.”
During the first decade of operations, the Fund has provided seed money for dairies, woolen mills, wool marketing warehouses, and the purchase of various kinds of processing, manufacturing and packaging equipment. It has also helped provide funds for feed mills, predator control efforts and genetics programs.
The Fund itself is an act of innovation. It began when the National Sheep Industry Improvement Center, or Sheep Center, was established as part of the 1996 Farm Bill to aid the nation’s ailing sheep and goat industries. The Sheep Center, which became the American Sheep and Goat Association (ASGA) in 2006, was created to develop a new revolving fund that would provide capital to the sheep and goat industries for marketing and infrastructure developments.
Since February 1997, the association’s board of directors which is the governing body appointed by the U.S. Secretary of Agriculture has pursued a number of actions to get the unique program working. Sheep and goat producer Pierce Miller of San Angelo, Texas, was chairman at the time the Sheep Center signed its cooperative working agreement with the National Livestock Producers Association.
“The use of a single intermediary, the NLPA, was a giant step toward realizing our goal of getting the Sheep Center monies working in the sheep and goat industries,” Miller said.
NLPA lends the loan program its extensive credit experience with a focus on agriculture and its ability to service loans nationwide, often using local lenders. Miller said NLPA works closely with industry leaders who possess an in-depth understanding of the sheep and goat industries and their credit and operational challenges.
Miller said that the performance of the Fund has generally met his expectations. However, he got some surprises as well, noting that “though we have loaned our initial capital several times over, I was surprised it took us so long to get fully loaned out. Now I wish we had more funds to lend.”
All decisions regarding applications and funding come from the Sheep and Goat Fund Committee. The group is made up of three industry members nominated by the American Sheep and Goat Association and four members nominated by the NLPA. All members are then approved by the ASGA. The committee held its first official meeting and released the Fund’s application to the public in January 2000. By May 2000 the Committee had its first loan applications to review.
Richard Drake, a lamb feeder from Windsor, Colo., has served on the committee from its beginning and has been chairman for the past five years. He said his greatest hope when the Fund was started was to have a balanced effect over all sections of the industry.
“There are many facets of our industry and I did not want to get caught up in one or two like only helping production or feeding. As the Fund progressed we found out that this was the least of our worries,” he said.
Drake believes that the Fund’s greatest achievement was being able to take the initial $14 million, lend it to the industry, grow the fund, and be a benefit to the industry.
“No other time in history of government has money been used so well and so properly. We set good guidelines and made them work,” Drake said.
Both Drake and Miller agreed that the most valuable asset of the program was having qualified and dedicated people to administer the Fund. Both also noted that the next important goal for the Committee is to continue to grow the Fund and ensure it remains a service to the industry.
“The next 10 years will be a challenge as our industry should grow in numbers, find many more demands from the consumer and it will need to work in an ever changing environment,” Drake said.
Miller said a major challenge in the future will be how to answer the continued consolidation of the industry because it reduces the numbers of borrowers.
“We must continue to seek new borrowers whose success can stabilize our industry,” he said.
The loan application process is somewhat more involved than just going to a local bank, Drake pointed out. “We work hard to accommodate quick turnarounds and we look closely at each applicant to help them get what they need from the program.”
The Fund can be used in many ways; purchasing land or equipment, renovations, implementing weed control, fire protection, predator control, and breeding and genetics programs. The fund also can be a valuable tool in restructuring a current financial package to aid in securing longer term, fixed rate loans that may otherwise be unavailable.
Drake said NLPA works closely with industry leaders who possess an in-depth understanding of the sheep and goat industries and their credit and operational challenges.
Funds are available to qualified applicants at a competitive interest rate. (Please call for current rates). Some basic information about the Fund includes:
Loans are available in amounts up to $1 million per applicant.
Sole proprietors are ineligible, but most other legal entities are eligible (partnerships, corporations, etc.)
Rates and terms are determined during the approval process.
The Fund is delivered through either direct loans or loan guarantees – grants are not available.
Applications can be submitted at any time without subject to deadlines. There is a one-time, nonrefundable fee of $100.
The application, descriptions of funded projects, news and industry links are available at www.SheepandGoatFund.com. Or you can contact Scharee Atchison at 800.237.7193, ext. 10 or via email at NLPA@NLPA.org.