For more information or to be added to the media contact list, please contact:
John J. McBride
Mark Mackey
800-821-2048
jmcbride@lmaweb.com

For Immediate Release

January 13, 2011

Livestock Marketing Association Update on the Eastern Livestock Bankruptcy:
Market Livestock Through Member Auction Markets to Ensure Prompt, Secure Payment

(January 13, 2011)  KANSAS CITY, MISSOURI – In light of recent events surrounding the default and bankruptcy of Eastern Livestock Company, the Livestock Marketing Association (LMA) and its member livestock auction markets want to reassure livestock producers that they still have a proven, fiscally sound method for marketing their cattle.   

“There were 731 producers who received bad checks from Eastern but not one of those defaults came from a livestock auction,” said Mark Mackey, LMA chief executive officer.  “Unfortunately those producers probably wish now that they had sold through a livestock auction market where 100% of payments to producers were made. 

“Livestock auction markets remain the most secure way to market cattle,” Mackey explained. “Livestock auction markets protect the farmers and ranchers they serve by acting as the agent to transfer ownership from the seller to the buyer.  That means that at the end of the sale, the producer gets a check that is backed by a bonded and regulated account and the auction market assumes all of the risk for non-payment.  You don't hear a lot about this because livestock auction markets assume that risk for a very small cost – commission.”

Livestock producers agree with Mackey’s assessment of the value of working with livestock auction markets. 

“What I like about it is I take my cattle in, I get my money that day,” said George Parker, a Tennessee cattle producer. “I never have to worry about their checks.  It’s just the peace of mind of knowing that they (the auction markets) are taking the risk and you will be paid in full.  Also, if you have a large group of livestock at a livestock auction market, you have the option of doing a video auction.  And you always get a fair price for your livestock.”

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About the Livestock Marketing Association
LMA is North America’s largest membership organization dedicated to supporting, representing and communicating with and for the entire livestock marketing sector. LMA provides a wide array of products and services to livestock auction market members to help them conduct business in an efficient, fiscally sound, profitable and responsible manner.  In addition to being the voice of the North American livestock auction industry in the public policy arena, the LMA also provides the following services to member auction markets:

·         Legal assistance
·         Industry information
·         Credit reporting
·         Risk management tools
·         Specialized insurance products

“It’s our mission to help the livestock auction markets remain efficient and viable in an ever-changing industry,” said Mackey.  “We encourage livestock producers to get in touch with their local livestock auction market to learn more about the advantages of working with this proven channel for marketing their livestock.”

For more information about the Livestock Marketing Association or to locate your local livestock auction market, please visit www.lmaweb.com. 

Glossary of Terms
To provide both journalists and media consumers with a more thorough explanation and understanding of the livestock marketing industry, the Livestock Marketing Association provides the following glossary of terms.  

Livestock auction market:  a place of business to which the public may consign livestock for sale by auction open to public bidding or sold on a commission basis.  Livestock auction markets are regulated by the USDA Grain Inspection, Packers & Stockyards Administration (GIPSA).  Under GIPSA regulations, livestock auction markets are required to have separate “custodial funds” accounts that is designed to ensure payment to consignors, in addition to executing and maintaining a bond (the size of which is based on the entities’ volume of business). 

Livestock Dealer:  Any person (not a market agency) engaged in the business of buying or selling, in commerce, livestock either on his own account or as an employer or agent of the vendor or purchaser. Also regulated by GIPSA, dealers are only required to execute and maintain a reasonable bond as a measure of protection for livestock sellers.

Order Buyers:  An individual or individuals who is/are buying livestock on order from another person or company such as a feedlot or packing plant. An order buyer may or may not be required to be “bonded” – this depends upon whether the order buyer takes physical possession of the livestock.