How to Get Loans to Start a Stocker Cattle Operation in Texas

If you have a surplus of grass and land on your Texas property, you may want to consider launching a stocker cattle operation. A stocker cattle operator brings in recently weaned calves and raises them through their early growth stages. The stocker cattle are then moved to a finishing operation prior to slaughter. The calves' growth is typically achieved through grazing, but feed like hay may also need to be purchased. Before you can launch your business, you need to review the costs associated with the venture and apply for any loans to finance the equipment and cattle needed.

Things You'll Need

• Financial statements

Instructions

1. Review the costs associated with running a stocker cattle operation. Besides calves, you need money for land rental, seeding, fencing, hay, veterinary care, labor, water pumping systems and tractor equipment.

2. Write out a business plan to present to financial institutions for loan approvals. Besides presenting the costs needed to launch the business, present information on how your business plans to make a profit. Include data on the initial purchase price of livestock, the cost to maintain the cattle and the selling price of the cattle.

3. Find a banking institution in Texas that specializes in agriculture loans. Examples of Texas banks that offer this type of funding include First Victoria and Capital Farm Credit.

4. Fill out the required loan documents to receive approval. The information required includes a cash flow statement, current balance sheet, description of business, copies of bank statements and copies of income tax returns.

5. Give information about the farm you plan to use for the operation. The lender will want to know the acreage of native and improved pasture, ownership of the land, presence of environmental hazards, structures on the property and road access.

6. Go over the terms of the loan with your lender. Stockers may receive either revolving lines of credit or a set loan amount. A per-head margin requirement may be specified by the lender and you must pay a certain amount based on your stock needs.

Tips & Warnings

• If you want information on how to launch a stocker cattle business and advisement on lending, the Farm Service Agency of Texas from the United States Department of Agriculture offers free webinars.

References

• University of Wisconsin:Stocker Cattle Convert Pasture to Profits
• Cattle Today: Reseach All Sectors of Industry Before Getting Started
• First Victoria: Agriculture Loans
• Capital Farm Credit: Agricultural Production Loans
• Virginia Cooperative Extension: Getting Started in the Cattle Business in Virginia

Resources

• Farm Service Agency: Texas