Two new Bank of North Dakota loan programs approved Wednesday by the North Dakota Industrial Commission will help livestock producers affected by the drought.
The state-owned bank will offer the Breeding Stock Rebuilding Program, helping producers buy cattle to rebuild breeding stock to average levels before the drought.
A second loan, the Feed Cost Program, will help livestock producers buy feed if they can demonstrate an expected shortfall.
“The economic impact of this drought on livestock producers in our state has been significant,” said Gov. Doug Burgum, chairman of the Industrial Commission, in a statement. “These programs address not only the short-term needs by assisting with feed costs, but also the long-term need of rebuilding stock.”
Borrowers will work with their local lender, which work with the Bank of North Dakota. The state-owned bank is limiting its share to $500,000 per borrower for the Breeding Stock Rebuilding Program and $100,000 per borrower for the Feed Cost Program, said President Eric Hardmeyer.
The Bank of North Dakota has not set a cap on the loan dollars available, but bank officials anticipate the demand could be as high as $20 million to $30 million, Hardmeyer said.
“We’re not limiting it; that’s just what we anticipate usage might be,” he said.
More than 80 percent of North Dakota has been affected by the drought, with much of the state classified as extreme drought (D3) or severe drought (D2). Some areas also have been classified as exceptional drought (D4), the most severe rating by the U.S. Drought Monitor.
To be eligible for the loans, a borrower must be a North Dakota resident who is a livestock producer from a county designated D2, D3 or D4 at any time in 2017 according to the Aug. 1 U.S. Drought Monitor map. Producers in adjacent counties also are eligible.
“This is a solid next step in responding to the needs of the agriculture industry to ensure it remains strong,” said Agriculture Commissioner Doug Goehring in a statement.
The program will be open through June 30.
Fixed and variable interest rates are available, set at 4.75 percent for a five-year fixed rate and 3.25 percent for a variable rate.
The Bank of North Dakota, the nation’s only state-owned bank, has offered similar programs off and on for 20 years through partnerships with banks around the state, Hardmeyer said.
“Because of that unique partnership, we’re able to provide these programs,” he said.
For more information, visit www.bnd.nd.gov.