ASI Supports Creation of Dealer Trust
October 13, 2017
This week, the American Sheep Industry Association joined with the Livestock Marketing Association to support the creation of a livestock dealer’s trust. Following a handful of dealer defaults since the Eastern Livestock debacle, we have seen sellers left financially devastated. The creation of a dealer trust would correct the fundamental unfairness in the current law where farmers and ranchers who sell livestock and their agents are left unpaid in the event of a livestock dealer default.
While dealer bonds under the Packers and Stockyards Act are designed to protect sellers in a default, bond payments have proven to average less than 15 cents on the dollar and in the case of Eastern Livestock, were closer to 5 cents on the dollar. Conversely, increasing the bond amounts could push many livestock dealers out of business and leave rural areas across the country underserved. The creation of a trust would not change business practices or current government funding, but would give sellers the assurances and protection they need in the event of a default or bankruptcy.