This post is part of a Microloan Success feature series on the USDA blog. Check back every Tuesday and Thursday as we showcase stories and news from USDA’s Farm Service Agency.
For David Hoff, farming was in his blood. It had been 14 years since he worked on his family’s South Dakota farm. He went off to college, earned a degree in business, landed a position in sales and, over the next 10 years, held leadership positions in sales for several companies. But he had been thinking long and hard about returning to the 2,000 acre farm and rejoining the family operation.
Then in 2012, Hoff received the sad news of his uncle’s death. His uncle had farmed with Hoff’s father in Hutchinson County, S.D. for years. That’s when Hoff decided to return and help his father with the farm.
“This was a big change for us. I was used to bringing home a paycheck every two weeks and now that was going to change in a big way,” said Hoff. “There are no guarantees in farming and you can’t write down what you are going to make each year. My wife likes to have a clear plan and that was a challenge for her to overcome.”
“I explored various options such as putting all the inputs on my credit card and obtaining financing through some other source,” said Hoff. “But those options weren’t an option.”
The high interest on the credit cards would cut into his profits or could potentially lower his credit rating, while commercial lenders wouldn’t take a chance on someone 14 years removed from the farm. So it was difficult for the new farmer to come up with the money to pay operating inputs.
Then one day Hoff’s father, Joe, took a routine trip to the local Farm Service Agency (FSA) office where he learned about USDA’s Microloan program. The program allows beginning, small and mid-sized farmers to access up to $35,000 in loans using a simplified application process with up to seven years to repay.
“My father discussed my options with an FSA loan officer and found out that the Microloan was a perfect fit for my operation,” said Hoff. “The $30,000 loan allowed us to pay for farm related expenses as well as cost of living support until I was able to market my alfalfa, corn, and soybeans and generate income.”
Now in his second year, Hoff graduated from the Microloan and received an operating loan to purchase equipment and help farm 300 acres of corn, soybeans and alfalfa in 2014.
“My ultimate goal is to continue the family farm. My dad turns 65 this year and slowly wants to step back. I say slowly because he is not quitting farming, but I am taking on a bigger role this year and eventually will make majority of the farm operation decisions,” said Hoff. “There is no way I could have made this career change without the full support of my wife and I couldn’t have started farming without my mom and dad’s support and guidance. I don’t regret it at all and I wouldn’t change a thing.”
USDA employees are proud to see the progress that farmers and ranchers are making in their daily operations with the help of the Microloan program. To date, USDA has issued more than 4,900 Microloans totaling $97 million. Visit the FSA website to learn more about our farm loan programs.