Feeder Associations Loan Guarantee Program

  The Feeder Associations Loan Guarantee Program was introduced to help BC beef and sheep producers add more value to their livestock operations by helping them raise their calves or lambs to heavier weights before selling.   The program increases the availability of livestock feeding credit through encouraging the formation of farmer owned cooperatives, called Feeder Associations.   These Associations borrow money from banks or credit unions and purchase cattle or sheep for grassing, or feeding out, on members' farm or feedlot.  The province provides a loan guarantee to the Association's lender.

What are the terms of the loan?

Loans are for maximum 12 month period.   Permission can be obtained for an extension to 15 months under special circumstances. (e.g. Loans on cattle that are not ready for market).

The loan must be used only for the purchase of feeder cattle.  Breeding stock are not included.  Loans cannot be made for feed or facilities.

A loan can be made for the full value of feeders purchased through a licensed livestock dealer.

 

Who is eligible?
All persons are eligible who:
  • are residents of British Columbia; and
  • are at least 19 years of age; and
  • own or lease a farm in British Columbia
 How much is the guarantee?

The Province of British Columbia will guarantee to the lender repayment of up to 25 percent of the loans outstanding.

 

Can Producers place their own livestock in the program?

The Association may purchase livestock from a  member to be fed by that member with the approval of the supervisor of the Association.		 Who owns the livestock?

The association owns the livestock.  They are identified with the registered brand of the Association, and are fed by the member on contract with the association.

 

Do cattle need to be fed for slaughter?

Livestock may be sold as feeders, shortkeeps or for slaughter.

They may be fed in a custom feedlot provided charges are paid on a monthly basis.  However, all producers must own or lease a farm in British Columbia.

 What security do members provide?

Members are required to place in the associations assurance fund, 5 per cent of the value of the cattle on loan.

In case of default, the association repays loans from the assurance fund before any payment is made under the guarantee.

 

What are the guaranteed loan limits?

For each member, the guaranteed loan limit is determined by the association to a maximum of:

  • $25,000 for  new members  who have never had a Feeder Agreement..
  • $50,000 for members who have belonged to a feeder association for more than one year, but less than 2 years.
  • $100,000 for members who have belonged to a feeder association for more than two years .
  • $200,000 for members who have belonged to a feeder association for more than 3 years.
 What are the advantages to the Livestock Producer?
  • A reliable source of credit is available on short notice from the association.
  • The Interest rate is competitive or better than on an individual basis.
  • The minimum 5 percent deposit allows feeding operations to continue during periods of limited cash flow.
  • Livestock Mortality Insurance.
  • The association is controlled by its members.

For more information/E-mail, please check out:

FEEDER ASSOCIATIONS 

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