Glasgow Daily Times, Glasgow, KY

Local News

November 21, 2010

Farmers, drivers have checks returned

GLASGOW — Those in one nationwide business work all year, honing their skills and making sure the product they bring to the public is valuable. At the end of the year they expect to receive their salary that will pay for the work they’ve done, the insurance they must buy and other necessary expenses.

They receive a check and wait for the funds to enter their bank account, but all they received are bounced checks and notifications from the federal government that the money is not there.

This is the situation of many cattle farmers in the area because of the downfall of  Eastern Livestock Company, LLC.

“We had no earthly idea this was coming,” said Jimmy Manion, who lost more than $4,000 in cattle sales when he sold to Edmonton Livestock, which is owned by Eastern.

Eastern, a market agency that buys and sells feeder cattle as a dealer and on an order-buying basis, began issuing unfunded checks to producers for livestock purchased by the company in different markets on or around Nov. 3, according to the United States Department of Agriculture.

Eastern was once based in Louisville, but now is headquartered in New Albany, Ind., is under investigation by the Grain Inspection, Packers and Stockyards Administration. GIPSA is a federal agency, part of the USDA’s Marketing and Regulatory Programs. The company allegedly owes more than $94 million in unpaid livestock transactions.

Kentucky is one of 30 states to be affected by the unpaid checks, Jim Brownlee of the USDA said in a previous Daily Times article.

Brownlee said the USDA is not certain exactly how many checks have been returned or how many farmers have been impacted.

“I don’t know how far down the line [at Eastern] you have to go to find where the buck stops, but somebody knew that the money wasn’t there,” Manion, a retired teacher and coach, said.

For Manion, the loss wasn’t enough to bankrupt him, but it is still a lot of money for which he will have to compensate. He and his business partner, Chad Withrow, sold half their cattle in Edmonton and half at the Glasgow auctions. Now, Manion says, they will sell 100 percent in Glasgow. Withrow, also an educator in the Barren County school system, lost more than $8,000 in the sale. In total, the pair lost 18 cows and $12,100.

Many of Manion’s friends have lost money from their sales through Eastern, including Allen Brown.

Brown considers himself one of the lucky ones because he only sold one cow at an Edmonton sale, a crippled cow that went for $343.

“There are people that sold for their insurance or to pay off their farms or things like that, it was their life,” Brown said. “Three hundred dollars to me is like $3,000 to some bigger farms.”

The loss won’t keep him and his wife from eating or living, Brown said, but it’s still money he would like to get back.

“I’m just a person that wants what is mine. I won’t take your money and I don’t want you to take my money,” he said.

For Eric Brown — no relation to Allen — the money was not to provide for himself (though his parents also lost some money), but to provide for schooling. The 23-year-old sold four calves to pay for a trip through Western Kentucky University to Ecuador. The class will tour agricultural sites there, at a cost of $1,700 per person. The check from Eastern took three to five days after deposit to return unfunded.

“We’re trying, it definitely set us back,” he said. “We had to find a way to come up with the money within a week.”

He has sold a few more calves in Glasgow markets and has come up with the first payment. He still plans to have the trip paid for before the first week of January, when full payment is due.

All of the men have received notification from the USDA to provide proof and details of their sales and losses. Allen Brown and Manion specifically said they were not faulting the employees at Edmonton Livestock and said they never had a problem there. Neither have plans to sue Eastern, but would like for government to do more than just add up the numbers for farmers that may be bankrupt after all is said and done.

“The people that are hurt are the ones that are not protected [by bailouts or bankruptcy protection],” Manion said. “What [Eastern] did is robbery but they probably won’t get a smack on the hand for it.”

Brown is keeping an eye on the market while still trying to understand what happened to all the money and the cattle.

“Eastern sold them and they had to pay to get the cows taken out of there after they got the money [from the sales],” Brown said. “Where did the money go? There are so many unanswered questions.”

As for new developments in the Eastern case, a forensic data recovery team arrived at Eastern on Nov. 18 to reconstruct all Eastern transactions, according to the Livestock Marketing Association. It is very important to note that no livestock connected to Eastern should be moved or accepted without full legal counsel, the LMA said in a statement.

“I think it’s a very great possibility we will get nothing,” Manion said. “But somebody owes somebody something.”

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