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Maximums for loan guarantee program doubled

Feeder association members can get up to $2 million from loan guarantee program to finance calf crop

The maximum loan limit for the provincial Feeder Association Loan Guarantee Program has been doubled to $2 million.

The increase, which applies to both individual and joint membership loan limits, will allow feeder associations to distribute their fixed costs across a greater number of livestock and provide increased access to capital.

The provincial government is also increasing the maximum equity advance for risk-mitigated cattle from 50 per cent to 75 per cent to give members of feeder associations access to more equity and the ability to generate more favourable cash flow.

In 2016, the Alberta government increased the provincial loan guarantee to $100 million from $55 million for feeder association members buying and feeding livestock for market.

The program, which dates back to 1936, finances 17 to 24 per cent of the calf crop each year.

To be eligible for financing under the program, a farmer must be at least 18 years old, reside in Alberta, and own or lease land. The maximum amount of borrowing per member is $1 million.

Eligible individuals must also be approved by a local feeder association. Local associations make their own financial arrangements with their lender regarding interest rate and total loan limit. The contract between the individual feeder association member and the local feeder association is for a term of one year or less for feeder steers and heifers and 120 days or less for feeder cows.

The local feeder association retains legal ownership of the cattle purchased under the program. The livestock purchased are fed, managed and ultimately marketed by the individual feeder association member.

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