The United States Department of Agriculture (USDA) Agriculture Marketing Service (AMS) has proposed a study to look into the feasibility of implementing a livestock dealer statutory trust. This type of trust would reduce the buying capacity of livestock dealers leading to a negative impact on market prices for all livestock sellers throughout the country.
Comments on the proposed study may be submitted to AMS electronically by clicking the following link: https://www.regulations.gov/comment?D=AMS-FTPP-19-0037-0001.
Comments must be received by AMS no later than Monday, June 24, 2019. Please take a few minutes to submit the comments provided below. They can easily be personalized and copied into the comment field at regulations.gov. Your input is critically important!
June 19, 2019
Docket ID: AMS-FTPP-19-0037
Agency: Agricultural Marketing Service (AMS)
Parent Agency: Department of Agriculture (USDA)
Submitted electronically to http://www.regulations.gov/
RE: Feasibility of establishing a livestock dealer statutory trust
I oppose the creation of a livestock dealer statutory trust.
A dealer trust would both reduce actual money available for dealers to purchase livestock and increase financial risk to lenders. This increased financial risk will reduce the amount of financing available to livestock dealers while increasing their cost of borrowing money. When combined, these limiting factors will drastically reduce buying capacity of livestock dealers, thus adversely affecting market prices for all livestock sellers.
Additionally, Texas cattle producers know firsthand just how few are protected under a trust. There are countless livestock sellers that have yet to receive any payment for livestock sold to Sam Kane Beef Processors LLC prior to the company filing bankruptcy, even though a Packers Trust was in place. If there are insufficient funds available, livestock sellers are going to be left empty handed regardless.
In short, a livestock dealer statutory trust attempts to mitigate a nominal risk but promises very little reward and greatly costs all market participants.