Cattle producers and livestock associations in Manitoba will now be able to get provincial guarantees on larger loans to invest in feeder and breeder cattle.
The province on Wednesday announced increased borrowing limits under its Manitoba Livestock Associations Loan Guarantee (MLALG), a program meant to allow producer members of livestock associations to get more favourable financing terms than they’d be able to get individually.
The program’s borrowing limit is now $8 million, up from $5 million, for associations, and $500,000, up from $300,000, for associations’ individual members. Participating associations must have at least 15 members.
Producers taking part in the MLALG program can use the funds to buy feeder or breeder cattle, with repayment terms of up to one year and up to seven years, respectively.
Under MLALG, cattle are bought in the association’s name, and for security purposes ownership remains with the association. Individual members are responsible for care, feeding and marketing of the livestock, and thus are entitled to profits on sales.
MLALG, set up in 1991 and administered by Manitoba Agricultural Services Corp. (MASC), offers a 25 per cent guarantee of the loans made by private-sector lenders to livestock associations.
MASC in 2014 approved total loans of $21.6 million for eight livestock associations with more than 200 members in all, provincial Agriculture Minister Ron Kostyshyn said in a release Wednesday.
“Changes to the borrowing limits were needed to reflect higher cattle prices and the growing size of livestock operations across the province,” he said.
“Based on recommendations from livestock associations and livestock producers, the expansion will help ensure producers can access the financing they need to manage their farms effectively.”
“The increase in borrowing limits will go a long way in making the program a viable option to finance the purchase of cattle required for expanding operations with the new reality of dramatically higher prices,” Rob Smith, executive director of the Association of Manitoba Feeder Co-operatives, said in the province’s release. –– AGCanada.com Network