Young farmers take on debt, uncertainty

Nov 26 2010 - 3:19pm

Michael Moose was standing on rented land in mid-November. His finger was bleeding and he was waiting for his dad to return with a hydraulic pump for fixing a tractor older than he is.

At 34, he has a bachelor's degree in business administration and experience as a police officer but, Moose said, he grew up farming. He has struck out on his own, building a farm in northwestern Pennsylvania's Mercer County from the ground up.

So has Paul Critchlow Jr., named for his dad, the last dairy farmer on Route 8 between Pittsburgh and Erie, Pa. The 31-year-old tried working in landscaping and in paving and concrete. He even had his own business trimming hooves.

Then a farmer in Butler County's Mercer Township, near Critchlow's father's farm, was getting out of the dairy business. Under articles of agreement, Critchlow and his wife Marla have purchased the cows and the equipment, and have 10 years to buy the land.

While high tech start-ups generate buzz, thousands of people like Moose and Critchlow are going into business for themselves in a more traditional way: with land and livestock.

It's hard to go into farming. Once someone gets in, it's nearly impossible to get out. In the bad years when farmers would want to get out, Critchlow explained, there's no market for the equipment or livestock. In the good years, no one wants to sell.

"It's not the most profitable industry around," said Charlene Berg, a loan officer for the U.S. Department of Agriculture's Farm Service Agency. "It's a lifestyle choice. It's debt management."

The government offers loans to beginning farmers. Berg explained that's anyone with less than 10 years of actual farming experience. To qualify, a farmer has to have at least a year of experience, either by running a farm for at least a year, sometimes risking his or her own capital, or by running someone else's farm.

Moose started small, renting land and hiring other farmers to use their equipment. With federal loans, he purchased his own used equipment so he can now sow the seeds and harvest the land. Now he doesn't have to pay for labor, and he can do the job the way he likes it.

"I'm kind of a perfectionist," he said.

Last year, he lost 60 percent of his crop to blackbirds. This year, he lost about 18 rows of corn to deer and a bear.

Critchlow, like many dairy farmers, can quote the same statistic: Milk prices in 2009 were the same as they were in 1979. The price is set by the state's Milk Marketing Board based on a formula that most dairy farmers believe involves either darts or a Ouija board.

Critchlow produces fluid milk -- a high grade of milk used for drinking, cream and butter. While this year hasn't been great for milk prices, they have come in over costs. The Critchlows still have debt from 2008 and 2009.

Marla Critchlow, Paul Jr.'s wife, has a side job as Mercer Township's tax collector. But the decision to take over a farm was not an economic one. It was a way for the couple to raise a family in a lifestyle they prized. Their children -- ages 4, 3 and 3 months -- were all born after they started farming.

The first year, they lived in a trailer off site and drove over to work the farm's 87 acres and milk 18 cows at 6 a.m. and 6 p.m. The next year, they moved to the farmhouse. "Life became a lot easier," Marla Critchlow said.

Moose's 220 acres of rented farm land are on several separate parcels in Mercer County. He parks his equipment at his grandfather's farm when he is not using it.

Neither Moose nor Critchlow qualified for bank loans without collateral to back up equipment purchases.

Critchlow said banks rejected his loan applications. Then he filled out a stack of papers for the Farm Service Agency Loan.

Berg said banks don't understand farmers anymore. She said the agency has pools of money for any farmer who cannot meet a bank's lending criteria. Farm ownership loans are available to buy farmland, to build or improve farm buildings or to promote soil or water conservation.

In addition to seed and fertilizer, for which dealers will charge up to 18 percent interest, farm operating loans can be used to buy livestock, equipment, feed and chemicals. The money also can be used to refinance outstanding debt, buy crop insurance, pay for food and clothing and medical care or to hire additional labor for the farm.

The federal rates are tied to those set by the Federal Reserve and as of Nov. 1 the rate for an operating loan was 2 percent with the rate for a direct ownership loan at 4.125 percent.

Moose is also at the mercy of corn prices: He doesn't have a silo to store corn, so when he gets it out of the field, he has to sell it, which is generally when everyone else is selling and the price is the lowest.

Someday he would like his own silos. "The goal," Moose said, "is to get the equipment paid for. Then get a little bit of ground."

(Contact Ann Belser at abelser(at)

(Distributed by Scripps Howard News Service,


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