Producers apply for membership in a feeder and/or breeder association. Once approved, the association may begin to borrow funds from a lender to purchase feeder or breeder livestock on behalf of the member, subject to the following terms and conditions:
- Members must maintain an assurance fund deposit equal to at least five per cent (feeder) or 10 per cent (breeder) of the outstanding loans taken by the association on the member's behalf. This deposit is refundable, provided it has not been used to offset a loan default.
- Members may sell their own feeder heifers and steers, or bred heifers to the association for fair market value to generate operating capital while maintaining the benefits of ownership (some restrictions apply).
- All livestock purchased by the association on behalf of a member, and any offspring, are owned by the association and must be branded/tagged with the association's registered brand/tag.
- Members are responsible for repaying in full any loan(s) taken out by the association on their behalf. Producers continue to be responsible for repayment of loans should a guarantee payment be made to the lender.
- All livestock are sold in the name of the association on behalf of the member. The association makes the required payment on the member's account and returns any excess to the member.
Please see the Livestock Loan Guarantee Program - Policy and Procedure Manual for further information.