Canada’s largest cattle feeder co-op is set to resume full operations on Monday, May 26, as it undergoes a restructuring process that includes evaluating whether its members meet criteria to receive loans backed by the Alberta government.
A ministerial order that prevented the Picture Butte Feeder Co-op (PBFC) from issuing financing under the provincial feeder associations guarantee program was formally lifted by Alberta Agriculture Minister RJ Sigurdson on May 1.
The order, issued in late January, was based on a report from Alberta Agriculture and Irrigation’s Inspection and Investigation Section, which alleged the co-op was not complying with the province’s feeder association regulation, and that it was being operated in an “unsound manner.” Much of the province’s scrutiny, which is disputed by some parties, focused on whether the co-op had issued loans to people who should not have been eligible, and that advances were larger than allowed.
In a May 22 update to co-op members, Alvarez & Marsal — the court-appointed restructuring officer — says the minister officially informed PBFC it has brought its operations into compliance with the Alberta government’s Feeder Associations Guarantee Act and the Feeder Associations Guarantee Regulation.
The restructuring officer says it “has been working closely with Ministry, PBFC’s lenders, and PBFC’s newly hired local Supervisor in continuing to reconcile the books and records, paying top-up payments owed to members efficiently and when they become due, and preparing PBFC to resume full operations with a focus on transparency, member growth and enhancing PBFC’s overall processes and governance.”
In addition to hiring Cody McBride as the PBFC’s new local supervisor, Alvarez & Marsal says it is close to hiring a new administrator for the co-op.
As of January 31, 2025, the co-op had just over $281 million loaned out to its members to finance cattle purchases. The co-op entered a credit agreement in 2022 for up to $335 million in revolving financing from a syndicate of lenders, led by the Bank of Montreal. The restructuring officer has been negotiating an amended credit agreement that will allow PBFC full access to its credit facilities.
As reported earlier, inspectors visited 52 farms and feedlots in in early March as part of an inventory count that showed no evidence of missing cattle or deposits, according to the restructuring officer and Feeder Associations of Alberta.
Alvarez & Marsal says it is also developing new governance policies and procedures for PBFC, and is preparing to run an election to appoint a new board of directors, who will then take back control of the co-op.
As part of the restructuring and together with the amended credit agreement, Alvarez & Marsal is (re)evaluating all PBFC’s existing and new members to ensure they meet the province’s criteria for receiving guaranteed loans against their livestock.
“Certain members may no longer wish to seek loans from PBFC or certain members may not be eligible for such loans,” says Alvarez & Marsal, in the May 22 member update.
This has raised some concerns about who will cover the costs of the ongoing restructuring process, as well as potential future litigation. To date, the cost of the restructuring has been covered by unrestricted equity earned on PBFC’s deposits, but Alvarez & Marsal says it will be seeking a court opinion before the end of June on whether it should hold back a portion of security deposits from members that wish to leave PBFC or are not considered eligible members.
The Feeder Associations of Alberta, meanwhile, issued a news release on May 22 to say it is “very excited” to share that PBFC is resuming full operations.
“This has been an exceptionally trying time for the many members of PBFC that have had their operations put on hold through no fault of their own. We recognize the pace of business has no sympathy for interruptions and acknowledge the very tough financial position members were placed in…,” FAA says. ” We recognize that there is still work to be done for PBFC to normalize processes and operations as well as see the election of a new, independent board of directors. However, we also wish to commend the tremendous efforts of all the parties involved in this court process.”
Founded in 1991, PBFC has since grown to be more than 10 times larger than any of the other 44 feeder associations in Alberta, both in terms of financing and in utilizing the province’s loan guarantee program.
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Editor’s note: Please see this statement from RealAgriculture’s Shaun Haney regarding our coverage of the Picture Butte Feeder Co-op story.
Related: Picture Butte Feeder Co-op expected to resume operations “soon,” says Alberta government
