A Dealer Statutory Trust would improve recovery when a producer or livestock auction market is not paid for livestock sold to a dealer. While this is always important, the necessity to address this topic is greatly heightened today.
“The volatile down market in cattle prices due to COVID-19 has increased the urgency of the establishment of a Dealer Statutory Trust,” said LMA President Tom Frey. “The whole livestock sector is hurting and, unfortunately, this will lead to livestock payment defaults.”
When these defaults occur, a Dealer Statutory Trust would give unpaid sellers (markets and livestock producers) first priority to get livestock back Unfortunately, reacquiring the livestock is not typically possible under current law. Livestock dealers are in the business of buying and quickly re-selling livestock. If a Dealer Trust became law and the defaulting dealer resells the livestock, priority in the proceeds/receivables for livestock would belong to the unpaid seller.
Even in times of great disagreement, Congress and the cattle industry agree the Dealer Statutory Trust is a no-cost, bipartisan solution that provides needed certainty to livestock sellers in troubling times. Dealer Trust was introduced in the bipartisan Securing All Livestock Equitably (SALE) Act in both the House and Senate (H.R. 6067 / S. 3419) and is supported by a U.S. Department of Agriculture feasibility study. In addition to LMA, Dealer Trust is supported by the National Cattlemen’s Beef Association, United States Cattlemen’s Association, R-CALF USA, American Farm Bureau Federation, National Farmers Union, and American Sheep Industry Association.
LMA looks forward to continued work with the House and Senate to see this provision enacted into law.
LMA also appreciates $16.5 billion in additional funds the HEROS Act provides for producer direct payments in this unprecedented COVID-19 pandemic. These funds will help producers participating in the Coronavirus Food Assistance Program (CFAP) program recover cattle price losses
The Livestock Marketing Association, headquartered in Overland Park, Kan., is North America’s largest membership organization dedicated to supporting, representing and communicating with and for the entire livestock marketing sector. LMA has more than 800 member businesses across the U.S. and Canada. For more information, visit www.LMAWeb.com.