A provincial short-term loan guarantee program allowing Ontario beef producers to buy feeder cattle through farmer co-ops is set to expand its exposure, with new producers in mind.
The provincial ag ministry on Thursday announced it will boost its limit as the guarantor for the Feeder Cattle Loan Guarantee Program to $130 million, up from $80 million.
“This will allow more farmers, including new farmers, to get loans to buy feeder cattle and have improved access to competitive interest rates,” the province said in a release.
Eligible new farmers will be able to borrow up to $50,000 for cattle purchases, while “established farmers” can get up to $250,000 as per the program’s previous guidelines.
Through one of the province’s 19 feeder cattle co-operatives, a producer who applies successfully for co-op membership — and pays the annual membership fee — can then apply for a purchase order for the amount of an anticipated feeder cattle purchase. He or she can split a co-op loan to cover up to four groups of cattle.
Once a member gets a purchase order, he or she may then purchase said feeder cattle. The co-operative would facilitate the payment, supply ear tags (not CCIA-approved models), handle all paperwork for the loans, handle all correspondence with a lender and insure the cattle.
The member is not required to make payments until cattle are sold, for a period of up to one year. Financing is available for up to up to 100 per cent of the purchase value, and is based on a producer’s “integrity and ability to feed cattle.”
Applications for the Feeder Cattle Loan Guarantee Program are accepted year-round, currently lending to about 800 producers per year.
“This program has been a successful venture for over 20 years and this support will provide our young farmers with the resources to establish themselves in the Ontario beef industry,” Ontario Cattlemen’s Association (OCA) president Curtis Royal said in the province’s release.
The OCA keeps a list of contact information online for the province’s various feeder cattle co-ops.