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March 1, 2024 Business Tools

Discover your new trusted partner in livestock financing

Jake Wedman may have been raised on a mixed farming and dairy operation, but when it came time to build something of his own, the beef industry was calling his name.

Twenty-five years ago, he set out to start his own herd, and from the very beginning, financing programs from the Feeder Associations of Alberta (FAA) were there to support his dreams.

“When I first started out, for instance, the banks wouldn’t even really look at me because I was young and didn’t have much of a credit rating,” said Wedman, who now farms with his father and sons west of Nisku, Alta.

“I knew some of the people that were involved in our local feeder association, and they knew us, and they are super easy to deal with. They understand the cow business,” he continued. “It was just an easy fit that was comfortable, and we didn’t have to deal with a bunch of bureaucracy and red tape.”

Initially, Wedman purchased heifer calves through FAA’s Feeder Loan Guarantee Program to build his herd. When the Alberta Breeder Finance Inc. (ABFI) program was introduced, he became one of the first livestock producers in the province to use this low-cost financing option designed specifically for buying breeding stock.

The ABFI program assists producers in building or expanding their breeding herds by providing loans for the purchase of heifer calves, bred heifers, bred cows, cow-calf pairs, ewe lambs, and yearling ewes. With a very competitive interest rate and the option to use the equity in your cattle as a security deposit, this program finances 100 per cent of the value of the females for up to six-year terms.

“We mainly self purchase our own heifers just to create cash flow,” said Wedman. “We can still retain our own heifers and preserve our own genetics to put back in our program, and then use that money to better the rest of our operation.”

Through ABFI, each client can access a maximum loan of $250,00 without financial statements, and a maximum of $500,000 is available with an additional credit assessment.

While this is a particularly beneficial financing option for new producers, it also offers support for those who may otherwise find it difficult to retain females in light of current market conditions.

“I don’t see why you wouldn’t want to deal with them, to be honest,.” said Wedman, who considers ABFI to be a simple, reliable tool that’s served his business well over the years.

“It’s been a great program for us, and we’re happy to use it.”

Every year, producers just like Wedman turn to FAA and their local feeder associations, discovering a trusted partner with a solid foundation in livestock financing. With competitive interest rates, accommodating staff, and easy-to-use products that fit all facets of the industry, FAA’s financing options are an ideal alternative to securing loans through the banks.

When Coral Robinson and her family were first building their farm, financing through ABFI helped increased their herd numbers. Over time, the Robinsons turned to different FAA options to support the evolution of their business, which now includes a 400-head cow-calf herd, and a 1,200-head feedlot at Glendon, Alta.

“Every program that we used with the Feeder Associations of Alberta, the people have been really great to work with, and the interest rates are just always right,” said Robinson.

One such program that has been extremely beneficial for the Robinsons is the Western Cash Advance program (WeCAP), a flexible, low-cost operating cash option available through AAFC for all commodities.

At the time of writing, WeCAP provides interest-free advances of up to $350,000 to producers in Alberta and Saskatchewan. With repayment terms of up to 18 months for crops and up to 24 months for livestock, producers can sell their commodities when prices are favourable.

“When we went from just being a cow-calf operation a few years ago, and we were getting into feeding our own, that’s how we were able to [have the] cash flow to get to that point,” said Robinson.

“It actually really helped us to be able to expand our operation to the feedlot, and then it fell into place that it just became one of those regular cash flow tools.”

She also appreciates that the Feeder Loan Guarantee Program covers more than just the cost of purchasing the cattle, as banks tend not to include veterinary, branding, and trucking expenses as part of this total cost.

“Especially if you’re young and trying to get into feeding cattle, it’s nice not to have to take those expenses out of your cash flow right off the get-go,” she said. “Without WeCAP and without the Feeder Associations, we probably wouldn’t be able to expand the way we did in the last 15 years, so I have nothing but good things to say about the programs.”

This article was first published in Volume 4 Issue 1 of ABP Magazine (February 2024). Watch for more digital content from the magazine on ABP Daily.

About the Author

Piper grew up on a purebred cow-calf operation in Southern Alberta, and she studied English and history at the University of Alberta and journalism at the University of King's College. She has written for industry publications for more than a decade.

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Live: 182.00 (KN, TX) 185.00 (NE)
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