The Livestock Marketing Association (LMA) is reminding the more than 700 producers who got bad checks from the troubled Eastern Livestock Company that they still have “a proven, fiscally sound method for marketing their cattle.” The CEO of the LMA, Mark Mackey, points out that none of the defaults came from a livestock auction. Mackey says livestock auction markets “remain the most secure way to market cattle” because they protect the farmers and ranchers they serve. He says the checks producers get are “backed by a bonded and regulated account and the auction market assumes all of the risk for non-payment.”
The Indiana-based Eastern Livestock Company – a brokerage – did not have a bond big enough to cover the $130 Million dollars in losses realized by ranchers. Eastern checks began bouncing last November. Some livestock producers are expected to be put out of business by those losses.
Meanwhile, the trustee of Eastern’s bankruptcy case posted late last week on his blog that he’s been authorized by the bankruptcy court to assume and assign the more than 160 forward purchase contracts held by Eastern to third parties.