Beef Buzz News
Industry Association Spearheads Effort to Create Recovery Tool for Producers Victim of Dealer Default
Tue, 02 Jul 2019 10:34:03 CDT
Under current law, many people in the livestock industry believe sellers of livestock are not adequately protected against livestock dealer defaults. The Livestock Marketing Association holds the belief that unpaid sellers should have the ability to reclaim their livestock if they haven not been sold yet or if resold - then have the right to claim the proceeds from those resales. Chelsea Good, LMA vice president of government and industry affairs, recently explained the value in developing such a tool for vulnerable producers in the case of dealer default through appropriate legislative action.
"Dealer statutory trust would be a policy solution to a problem we have today. Unfortunately, if a livestock dealer fails to pay for livestock, currently there aren't very good tools to get recovery," she said. "If you're a producer that's selling to a livestock dealer in the country and if a bad check or no check comes - you would think you would have the ability to either go get those livestock back or if those livestock have been resold - then the proceeds of that livestock. That's not the case."
The only true form of recovery currently is through an official USDA bond claim, which only pays five to ten cents on the dollar. Good says that LMA is working to advocate on the industry's behalf for dealer trust legislation. According to her, when dealer default does happen, the impact is often quite significant. In response to current federal laws under the Uniform Commercial Code, states including Oklahoma have decided in some cases to take action and have created lien laws that prioritize unpaid livestock sellers' ability to reclaim stock or proceeds. This becomes a challenge in many situations however, since in the cattle industry business if frequently done between parties from different states who are therefor subject to different laws. This issue, Good asserts, is the reason behind the necessity of creating a uniform federal solution.
The USDA is currently under a directive included in the 2018 Farm Bill to conduct a feasibility study on such a solution. Good hopes for a positive outcome from that study and a path forward stemming from that report that will eventually lead to congressional action on this matter.
Listen to today's Beef Buzz to hear Good speak more in depth about the need for statutory dealer trust, with Radio Oklahoma Ag Network Farm Director Ron Hays.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
Listen to today's Beef Buzz to hear Good speak more in depth about the need for statutory dealer trust
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