USDA TO BACK LOANS FOR NEW BEEF COOPERATIVE


                                              Release No. 0146.97

                                      Tom Amontree (202) 720-4623
                                               tamontree@usda.gov
                                    Jim Brownlee   (202) 720-4623
                                               jbrownlee@usda.gov

USDA TO BACK LOANS FOR NEW BEEF COOPERATIVE

     WASHINGTON, May 1, 1997--Agriculture Secretary Dan Glickman today
announced that the U.S. Department of Agriculture will offer loan guarantees
to help ranchers in seven states start a new beef processing and marketing
cooperative. USDA's Business and Industry Guarantee Loan program will help
secure loans made by banks to ranchers who buy stock in the cooperative. 

     "Several factors including bad weather and industry concentration of
the meat packing industry have left these ranchers fighting for survival,"
Glickman said. "A rancher-owned cooperative that would process and market
premium beef could provide these hard-pressed ranchers with an opportunity
to keep more of the value-added profits generated from the sale of their
cattle."

     The new enterprise, the Northern Plains Premium Beef Cooperative, is
currently seeking rancher-members who will invest a minimum of $2,500 in the
cooperative and pledge to deliver cattle to the co-op. Members are being
sought in North and South Dakota, Montana, Minnesota, Wyoming, Iowa and
Nebraska, as well as two Canadian provinces (although the Canadian ranchers
would not qualify for USDA assistance). 

     The cooperative needs to raise about $60 million, half of which is to
come from member investments. The cooperative plans to build a $36-million
processing plant and market its own brand of premium beef.
     
     "The 1996 Farm Bill expanded lending authority under the Business and
Industry  Guarantee Loan program so that USDA can back loans to farmers and
ranchers who invest in new cooperatives producing value-added products,"
said Jill Long Thompson, under secretary of USDA Rural Development. "In this
way, we not only help producers, but also the rural communities in which
they live and work."
     
     The expanded lending flexibility under the 1996 Farm Bill has combined
with Clinton Administration efforts to streamline program application
procedures and regulations to increase  participation in this USDA Rural
Development program. "We have slashed application paperwork for the Business
and Industry Loan program by 50 percent," said Dayton Watkins, administrator
of the Rural Business-Cooperative Service of USDA. So far this fiscal year,
USDA Rural Development has guaranteed $468.7 million for 368 rural
businesses, compared to  $237.4 million guaranteed for 224 applicants at
this time last year. 
                                       #


NOTE: USDA news releases and media advisories are available on the Internet.
Access the USDA Home Page on the World Wide Web at http://www.usda.gov