A nasty drought in some regions has forced Alberta cattle ranchers into a corner. High temperatures have slammed this year’s barley, wheat and corn crops, making it impossible for ranchers to feed all of their herds.
They must now make a difficult decision: cull their herds or sell off their livestock at the auction market.
That’s a tough choice, but there may be hope yet!
On Monday, the Alberta government announced amendments to the Feeder Association Guarantee Regulation that will raise the amount that ranchers can take out in loans from $2 million to $3 million.
The change will give ranchers that are members of the Feeder Association more options to purchase and market their cattle through the Feeder Association Loan Guarantee Program.
“These amendments ensure thousands of producers across the province have access to the capital they need to keep producing Alberta’s world-renowned beef,” said Agricultural Minister RJ Sigurdson in a statement.
This program will offer loan guarantees to help local ranchers get the financing they need to compete globally.
Put simply; a loan guarantee is a promise by one party to take over the debt obligation of a borrower if that borrower fails to pay their debt.
Here’s an example. Let’s say you want to take a home mortgage from the bank to buy a house, but the bank requires a loan guarantee.
In this case, a family member could provide the necessary loan guarantee to repay any debt if you fail to make the required loan payment, including any interest.
It’s the same deal with the Feeder Association Loan Guarantee Program, just with cattle, not houses. With cattle prices on the rise, our ranchers could use all the help they can get.
Specifically, cattle prices have risen by 25 percent since the start of 2023. The hope is that these loan guarantees will allow cattle ranchers to continue producing cattle for beef, Alberta’s largest agri-food export.
In 2022, beef, wheat, canola seed, oilseed cake and meal, and crude canola oil accounted for over two-thirds of our total exports. Our top customers were the United States, China, Japan, Mexico, and South Korea.
“These changes will help to ensure continued sustainable growth in Alberta’s livestock feeding sector, providing much-needed support to our existing feeder members…,” commented Program Chair Philipp Lammerding.
