The Alberta government is continuing to address the need for the significant capital necessary for the cattle industry to deliver the province’s world-renowned beef.
The government announced a 50 per cent increase to the lending limit of the Feeder Association Loan Guarantee Program to $225 million, from its previous $150 million. In three years, the program’s limits have increased 125 per cent, when it was maxed out at $100 million back in late 2022.
“The whole industry has seen a significant price escalation across all classes of cattle. Prices for feeders today are easily two and three times what they have been very recently. The North American herd is at multi-decade lows and supported by international imports. When you add in trade uncertainty, it is all the more important that we are able to provide this kind of support for our producers to assist in keeping them in the game as prices have ratcheted up,” said Craig Guthrie, executive director of Feeder Associations of Alberta.
Read Also
Canada’s plant hardiness zones receive update
The latest update to Canada’s plant hardiness zones and plant hardiness maps was released this summer.
“If you keep in mind that Feeder Associations finance up to 25 per cent of the feeder market in Alberta annually, any restriction to our program can have profound effects on both producers and the whole value chain. It has never been more important to have Alberta in a solid place. It leads the country and plays a significant role internationally in the provision of high-quality beef.”
Cattle prices have reached unprecedented highs. Compared to last year, average finished cattle prices rose nearly 16 per cent and feeder cattle rose by 27 per cent according to Darby Crouch, press secretary to Minister of Agriculture and Irrigation RJ Sigurdson. Feeder associations need to be able to take advantage of favourable markets while managing the costs of feeder cattle and feed, which is where the increase to FALGP comes in.
According to Guthrie, FAA has been working with Sigurdson and his team for some time on the lending limit increase and are extremely happy to see it come together.
“Alberta is a beef province, and livestock is a huge part of our agricultural industry. Our cattle and sheep producers put food on tables in our province and around the world. Increasing the limit on Alberta’s loan guarantee program will ensure thousands of producers across the province have access to the capital they need to keep producing Alberta’s world-renowned beef,” said RJ Sigurdson, Minister of Agriculture and Irrigation, in a press release to the Western Producer.
As demand for Alberta beef continues to grow internationally, leading to higher prices, locally owned feeder associations are turning to the Feeder Associations Loan Guarantee Program (FALGP) for low-interest financing backed by a government guarantee, to help feeder associations who help livestock producers get financing to buy animals and grow their herds.
FALGP helps local, producer-run cooperatives get competitive financing to ensure they can continue being a player in the global market. As beef prices continue to increase, the program helps ensure producers have access to the capital needed to grow and diversify their operations. Since its establishment in 1936, the program has provided more than $12 billion in loans.
“This increase in funding will see our 45 feeder associations across the province have access to funding that is critically needed to support Alberta’s livestock industry. Without this kind of support, our industry would be facing a dire shortfall in available lending at the local feeder associations across the province. The rapid escalation in the cost of livestock simply makes it unfeasible to operate at previous levels and the last thing we need is to see any pressure on overall beef numbers in the province, ” said George L’Heureux, chair of Feeder Associations of Alberta in a press release.
The FALGP did involve some controversy in late January, as the Picture Butte Feeder Co-Operative was suspended from the program from making any further advances to its members. It was deemed the co-op failed to comply with some sections of the the Feeder Associations Guarantee Act with mismanaged finances. No other feeder associations were implicated by the order, which was eventually lifted, and the lending operations involving Picture Butte Feeder Cooperative resumed on May 26 after required personnel and operational changes were made. Of the 45 local feeder associations in Alberta, the Picture Butte Feeder Cooperative is the largest one, formed in 1991.
“Agriculture and Irrigation conducts regular inspections of all feeder associations to ensure compliance with the FALGP, ensuring a balanced framework for all feeder associations. Issues of non-compliance are rare, but taken seriously when identified. The government continues to oversee feeder associations to ensure the FALGP is used as intended and is supporting Alberta’s cattle feeder industry into the future,” said Crouch.
Being proactive and answering the call to shifting livestock markets, Guthrie is pleased to see the collaboration of the provincial government to a vital industry that helps power the agriculture economy.
“We know the minister values the program and this is proof of that support.”
