Colorado Rancher Loan Guide
Ranch financing, FSA programs and drought credit in Colorado

Drought and Disaster Credit

The Farm Service Agency’s Role in a Colorado Drought Crisis

When drought tightens its grip on Colorado pastures, the Farm Service Agency is one of the first federal offices ranchers call. Here is what FSA does, what it does not do, and how to prepare before you need it.

Illustration for the farm.FM story “Congress Investigates Farm Crisis, Finds Farming Costs Money”
Drought forces tough ranch decisions, and farm.FM ranching coverage gives readers more context on what dry years do to the bottom line. Read “Congress Investigates Farm Crisis, Finds Farming Costs Money” on farm.FM.

What does FSA actually do in a drought?

FSA administers several federal farm programs, including loans and disaster assistance. During a drought, its county offices handle paperwork for programs tied to losses, check eligibility and work with USDA decisions on disaster designations. You can read the agency overview at USDA Farm Service Agency.

FSA does not make every decision alone, and it cannot promise help before a program is available. What it can do is explain the options, take your application and guide you through the records you need. Confirm current program details with your local office.

How do disaster designations work?

A drought designation is a formal step that opens the door to certain kinds of help. It generally links back to drought conditions measured by the U.S. Drought Monitor and to USDA processes that determine which counties are affected. Designation by itself is not a payment, but it can make loans and other help possible.

Colorado's drought is rarely uniform. The Western Slope, the Front Range and the Eastern Plains can be in very different conditions at the same time. Check your county's status and ask FSA how it applies to your operation.

A short wet spell does not end a drought, and the designation process can lag behind conditions on the ground. That lag is frustrating, but it is normal. Use the waiting time to gather records, talk to your lender and plan feed purchases.

What kinds of credit can FSA offer?

FSA has direct and guaranteed farm loans, and emergency loans are tied to designated disasters. You can read how these programs are described at FSA farm loans and compare them with other credit at Farmers.gov loans. Eligibility depends on your operation, losses and credit history.

Emergency credit is meant to help cover actual losses and restore operations, and it comes with applications, documentation and deadlines. Never assume timelines, so confirm them with your county office as soon as a designation is announced.

If you already have an FSA loan, ask about servicing options if a drought makes payments hard. Rescheduling or restructuring may be possible in some situations, and early contact usually leaves more choices than late contact. Ask a county loan official what applies to your case.

What records should ranchers keep?

Keep records of herd numbers, feed purchases, grazing leases, pasture conditions, photos, rainfall and any culling decisions. Take dated photos of pastures and stock tanks. Written records show what you lost and support your application.

Also keep your financial records current. Tax returns, a balance sheet and production history all help a loan officer understand your operation. The beef cattle management guide and farm money resources offer checklists that make record keeping easier.

How can commercial lenders and FSA work together?

Many ranchers use both. Your operating lender may restructure, extend or refinance while FSA provides a guarantee or a separate loan. Talk to your banker before a crisis becomes critical, not after, because options narrow as cash runs out.

Other helpful contacts include the CSU Extension for drought management ideas and the Colorado Department of Agriculture for state resources. Ranching is stressful in a drought, and if the pressure becomes heavy, call or text 988 through the 988 Suicide & Crisis Lifeline.

What should you do right now?

Visit your county FSA office before conditions worsen. Ask which programs are available, what records you need and how to get on mailing lists for announcements. Update your financial statements and talk to your lender about a plan for the dry months.

Keep reading as conditions develop. farm.FM ranching stories often cover the economics of drought, and one post, a farm.FM story on drought and cattle, adds a ranch-kitchen-table view. For decisions, rely on official sources and licensed professionals.

Finally, talk to family. Drought decisions about selling cows, buying hay or taking on debt affect everyone on the place. A calm family meeting with the numbers on the table makes the next call to the bank easier. You can keep reading with farm money coverage on farm.FM.

Sources and further reading

Ask locally: Call your county FSA office and your ag lender, and use CSU Extension for drought management help.

General education only, not financial, legal or tax advice, and Colorado Rancher Loan Guide is not a lender. Rates, terms and deadlines change, so confirm current details with the lender or agency.

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