Chappell Feedlot has different finance options to suit our customer needs. Feed bill copies are usually sent twice a month for the customer to track the current expense of their lot.
Equity advances can be offered to the retained ownership customer. The amount of equity margin in the cattle depends on risk management. Normally downside risk protected cattle are 20% equity and 30% equity on unprotected cattle.
Feed can be financed and secured by the cattle. After the cattle are marketed, the feed and interest are deducted and the balance is sent to the owner.
Cattle and Feed Financing
Cattle and feed financing arrangements can be made based on the purchase value of the cattle. Equity investments are needed at time of cattle placement. Equity percentages of 20% on downside risk protected cattle and 30% on unprotected cattle. Risk management positions margin can be applied directly to the loan amount of the cattle lot.
Corn for a specific lot of cattle can be pre-purchased and stored for the lot of cattle. This option can help lock in their break even projection without using the futures market.
We can assist our customers with futures and options strategies to provide downside risk protection. Packer and basis contracts are also available with major packers.