Farm Credit Canada continues to lend to beef producers even though those customers are further behind in their loan payments.
Chief executive officer John Ryan said arrears totalled $5.7 million as of Oct. 31, compared to $3.5 million for the same time last year. That means 0.63 percent of the $1.7 billion in loans to Canadian beef producers are in arrears.
But Ryan told the Agricultural Producers Association of Saskatchewan annual meeting in Regina Dec. 4-5 that the corporation wrote $180 million in new loans to beef producers between April 1 and Oct. 31. He said that demonstrates FCC’s confidence in an industry struggling with drought and closed international borders.
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“The arrears that we have to date on the beef side of things are probably as much a factor of having a couple of real bad years from a drought point of view and high feed prices last year as compared to BSE,” Ryan told reporters.
FCC will have a better idea of how cattle producers are doing by the end of this month.
Seventy percent of the corporation’s beef loans are to cow-calf producers. Most of the payments are due in November and December, when producers sell their calves and have cash flow. Those payments are worth about $55 million.
“I expect that the vast, vast majority of our producers will be making the payments,” Ryan said. “One of the things I have seen with the producers, year in year out, is they do their utmost to make their payments.”
FCC offered payment postponements to its beef clients after a case of bovine spongiform encephalopathy halted international trade in Canadian beef and cattle.
Just 300, or five percent, have taken the corporation up on that offer.
If producers do find themselves unable to make payments, they should talk to their account manager, Ryan said. FCC prefers to work with each customer on these types of issues, rather than adopting a one-size-fits-all approach.
Ryan said producers do get back on track after postponements. Five years ago, a number of hog producers asked to delay payments when they were going through a tough time.
“Two years later we went back and had a look at it and 95 percent of them were back making regular payments.”
