CATTLE FEEDER / FEEDLOT PROGRAMS

Producers Livestock Credit Corporation

Omaha, Nebraska

800-950-7522

Producers Livestock Credit Corporation financing consists of two types: The Direct Loan Financing and the Contract Feeding Program. Both involve the financing of cattle to be backgrounded (dry lot or pasture) and/or finished. The Direct Loan involves the signing of a Note, Security Agreement and Loan Agreement. The Contract Feeding Program is done on a Contractual Arrangement. Under the Contract Feeding Program, PLCC owns the cattle for Security Purposes only and the equity (on the cattle), is contracted back to the customer. PLCC does not partner or share in the profit or loss of the cattle. The staff at PLCC will work hand in hand with the customer’s short-term lender due to their first lien position on the feed.

The PLCC Contract Feeding Program is extremely popular and simple to use. Once a customer is qualified for the financing, a contract can be set up for the purchase of a certain number of cattle. The cattle will be purchased through one of Producers Livestock Marketing Association’s (PLMA) marketing representatives at a sale barn or from another farmer feeder. If the customer wants to retain ownership in their own (home-raised) calves, PLCC can buy the calves at a fair market value. This will enable the customer to pay down the bank and continue feeding their own cattle. If the feed is available and the facilities are adequate, PLCC will finance 100 percent the purchase cost of the cattle (home-raised or purchased). The customer’s responsibility is to care for the cattle and provide the feed, labor and management of the cattle. He is still involved in the decision making process. When the cattle are sold, the proceeds go directly to PLCC to pay off the costs against the cattle. The equity goes to the customer and/or his short-term lender.

If the customer prefers to feed the cattle at a feedlot other than his own, margin equity per head is required and PLCC will advance for the feedlot costs of the cattle until the cattle are sold. A $125 per head equity margin is required for cattle that will be back-grounded; a $150 per head equity margin is required for beef cattle or $200 per head for Holstein steers to be fed out. If the customer hauls his own corn to the feedlot, a $75 per head equity margin is required. The feedlot has to be a PLCC approved place to feed cattle. When the cattle are sold, the check will be sent directly to PLCC. The equity proceeds will be distributed to customer and/or lender after deducting the purchase cost of the cattle, interest, feed, yardage, marketing fees and any other applicable expenses charged against the cattle. This may include risk management costs, transportation, ear tags and/or branding iron. In all cases, if a deficiency occurs on any of the contract(s) after the cattle are sold, the customer is responsible for the shortfall.

How to get started: If you are interested in financing with PLCC, a prospective customer must fill out an application, a feed inventory form (available in PDF form on this website) and submit three years of signed financial statements. The most recent financial statement should be less than three months old. The supporting schedules explaining the assets and liabilities should accompany the financial statements.

About PLCC: PLCC is a subsidiary of Producers Livestock Marketing Association (PLMA) and is located in Omaha, Nebraska. PLMA is a user-owned non stock service oriented cooperative that provides a livestock Marketing Service (for Cattle), a Commodity Service, a Pork Service and a Financial Service. The company’s headquarters are in Omaha, Nebraska. The trade territory includes Nebraska, Iowa, South Dakota, North Dakota, Minnesota, Missouri, Kansas, Montana, Illinois, Indiana and Michigan.

The Marketing Division consists of 17 cattle agents or sale representatives that provide expertise in the buying and selling of feeder cattle and fat cattle. The Commodity Division is located in Sioux City, Iowa and has three salaried commodity brokers that can handle all the customer’s risk management needs. The Pork Division consists of 7 agents that provide expertise in buying and selling of feeder pigs and finished hogs.

Call 1-800-950-7522 for more information