Lending money on cattle

[grassmarketeer]

Has anyone know the truth as to whether our american neighbors are defalting on cattle loans and leaving FCC holding the bag?

[cswilson]

Well Nilson Bros.use FCC to underwrite their finance program so it very well could be true to some extent.

[oxbow]

How the hell could anyone not be profitable with beef prices the way they are in the US? A loan with land as colateral is safe. A loan with cows is safe. If a feeder were to load up on some of these over priced calves, they could face ruin if prices come down to reality, but most lenders make you post 1/3 if you don't have price protection in place. Seriously, there are very few defaults at any lending source

[cowman]

Well oxbow I think grassmarketer was talking about all the American owned cattle up here in Canada? Americans piled into the calf market up here in a big way last fall, hoping to make a killing when the border opened in early 2004. Of course the Washington cow pretty well screwed up that deal, and now a lot of these American buyers are finding out first hand what kind of a raw deal we are getting!
One of the big boys in R-CALf(Debruckyer) is claiming he lost $300,000 or more! Now the total irony of the thing would be if he left the Canadian Farm Financial Credit Corporation holding the bag! Or for that matter he stuck it to a Canadian bank.

[kato]

What is FCC doing lending to non-Canadians anyway?

[oxbow]

I gotcha now cowman, that makes sense. If some guy loses his ass on one side ofthe border, can creditors cross the border to collect their money?

[cowman]

oxbow: I don't know. I would think that the creditors would be able to go after US assets, but I have no idea how that works. I'm not even sure if anyone tried to default.

[cakadu]

It would depend on the amount and extent of the assets. A lawyer here would have to either apply to be licensed in whatever state or hire a firm to act on your behalf in that state. You'd have 2 lawyers fees, one of them having to be paid in American dollars, so whatever you happened to be collecting for would have to be substantial enough to warrant going after it.

It could be done, but it would be a huge undertaking.