Optimizing Storage with the USDA Farm Storage Facility Loan Program

March 21, 2024

A USDA loan program makes it possible for farmers to store grain, soybeans and other commodities for later sale, according to Steve Dick, state executive director of the USDA Farm Service Agency in South Dakota. The Farm Storage Facility Loan (FSFL) Program is sometimes referred to as the grain bin loan program, said Dick.

“It’s not just grain bins. It can [be] grain handling equipment, whether it’s an auger or a grain bagger, grain cart, semi-trailer; we’ve even had some producers utilize it for freezer space to buy freezers if they are doing direct marketing of their beef,” he told the South Dakota Soybean Network. “So, any commodity that a South Dakota farm and ranch family produces would qualify for FSFL for storage or handling. We’ve had people that are commercial hay producers use it for hay sheds. They’re storing a commodity that they produce; they would qualify for this loan.”

The loan interest rate is likely to be lower than what is offered commercially, said Dick. “Consistently FSA’s (Farm Service Agency’s) rates have been a little bit lower than the private sector.”

There will be more information about this USDA program and others at South Dakota Soybean’s Shop Talk events. One of the Shop Talk events is Wednesday, March 27th, at East River Electric, in Madison, and the other is April 9th, in Yankton, at the Easton Archery Center. Steve Dick will be there to talk about the Farm Storage Facility Loan Program.

Aside from the opportunity to capture what could be a better grain and soybean market months after harvest, Dick points out that harvest itself is what he calls a mad rush to gather the crop in a timely fashion.

“Unfortunately, we’ve had some dry falls in South Dakota the last couple years, however sometimes that harvest window gets very, very narrow,” explained Dick, “and rather than sitting in line at the grain elevator or the ethanol plant, this allows producers to have that storage facility on their farm to speed up the harvest.”

Steve Dick is grateful for the chance to explain the FSFL program more fully to growers at the two gatherings.

“South Dakota Soybean was gracious enough to let us participate in their Shop Talks that they do. There’s this mindset that it’s just for our grain bins, and we want them to understand that that’s not the case. South Dakota is fourth in the nation as far as utilizing this program. We’re a large ag production state, but if you look at the commodities we produce, we’re usually anywhere [ranked] from eight to ten. Whether it’s corn, soybeans, [or] cattle, we’re somewhere in the bottom part of the top ten, but we certainly do utilize this program. We have some areas where it gets utilized a lot more than others,” Dick concluded. “We want people to know that it’s not just for grain bins anymore.”