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Home > Grants, Loans & Financing > Loan Programs > Dairy Modernization Loan Program

Dairy Modernization Loan Program


The 2004 Minnesota state legislature authorized the Commissioner of the Department of Employment and Economic Development (DEED) to make funds available to eligible local, regional or statewide development organizations for the purposes of modernizing dairy operations.

Eligible expenditures

Money may be used for loans for the acquisition, construction, or improvement of buildings or facilities, or the acquisition of equipment, for dairy animal housing, confinement, animal feeding, milk production, and waste management, including the following, if related to dairy animals:

  1. free-stall barns;
  2. fences;
  3. watering facilities;
  4. feed storage and handling equipment;
  5. milking parlors;
  6. robotic equipment;
  7. scales;
  8. milk storage and cooling facilities;
  9. bulk tanks;
  10. manure pumping and storage facilities;
  11. digesters;
  12. equipment used to produce energy;
  13. capital investment in pasture; and
  14. on-farm processing facilities.

Application Process

The process will work similar to the model established by the Minnesota Rural Finance Authority (RFA). Producers will apply for financing through their local agricultural lenders. Lenders will submit a loan application to the local Economic Development Authority (EDA). The local EDA then makes a determination as to if and at what level they will provide financing.

The loan application requires the producer and county to provide information regarding the producer's existing business, the intended use of the requested funds, and other information the commissioners find necessary to evaluate the feasibility, likely success, and economic return of the project, and to ensure that money can be provided consistent with other state and federal laws.


Terms of the loan are set by the EDA. The Economic Development Authority traditionally offers reduced interest rate loans to businesses in the community. These loans are generally for a 5 to 7 year term. An EDA will determine the level of financing and terms of a loan for dairy operations based on the availability of funds and the economic return of the project. 

Board Authorization

EDAs interested in making loans to dairy farmers will seek approval from their governing board. The governing board of the county or city Economic Development Agency will pass a resolution authorizing use of revolving loan funds for purposes of the Dairy Modernization Loans.

For Additional Information Contact

The local EDA or Bob Isaacson at DEED 651-259-7458