The apparent failure of the country’s biggest order buying firm has got the cattle business a buzz, but rumors are much easier to find than to verify.
What seems certain is that Eastern Livestock, LLC., one of the oldest and the biggest cattle order buyers in the U.S., has some $81 million in bad checks floating around the country. Their bank, Fifth Third Bank of Cincinnati on Wednesday filed to force the firm into receivership.
That is about all the "for sure" verified to date. Eastern’s phones didn’t answer on Wednesday. Superior Livestock—reputed to have been heavily dependent on Eastern as a customer—did not return a phone call.
But it looks like this is a case of another big player, working with big numbers and low margins, perhaps getting caught with a lot of float and a recalcitrant lender or creditor. Order buyers often buy cattle on speculation or receive payment for cattle days after paying for them.
USDA’s Packers and Stockyards Administration answered a request for more information, including verification of the size of Eastern’s bond, with a version of an earlier statement:
Following is what’s available on background while the investigation is underway:
USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) is onsite at Eastern’s headquarters assessing the situation, and investigating apparent violations of the Packers and Stockyards Act. GIPSA is working to ensure that all protections available are afforded to producers that might be impacted.
GIPSA is working with the Department of Justice to address the situation.