Province suspends loan program at Alberta's largest cattle industry lender after inspections

The Alberta government has suspended a loan program at Picture Butte Feeder Cooperative, the province's largest cattle financing cooperative, after an inspection alleged a number of financial mismanagement and regulatory issues.

The suspension could mean "a significant and unprecedented disruption" to members of the cooperative and their farming operations, according to one former official. The news comes as many Alberta ranchers are already worried about the financial impact of U.S. tariffs. 

The Picture Butte Feeder Cooperative, which formed in 1991, is part of the province's Feeders Association Loan Guarantee (FALG) Program, which helps livestock producers get easier access to loans. The cooperative is based in "Feedlot Alley," located in southern Alberta.

The FALG program has been in place in Alberta since the Great Depression, and is intended to provide "relatively easy access to low interest, leveraged financing backed by a government guarantee," according to the province.

In January, Alberta Minister of Agriculture and Irrigation RJ Sigurdson signed an order that stated the province would prohibit the cooperative from issuing further advances to its members under the program.

The province's claims were attached to an affidavit for Tony Ankermann, who was vice-chairman of the cooperative, dated Feb. 18.

They include that the cooperative allegedly accepted ineligible feeder members, used guaranteed loan proceeds for improper purposes, provided more advances than allowed and obstructed provincial inspections, among other violations. 

In response to the order, the cooperative sought court approval to appoint a restructuring officer, Alvarez & Marshal, to oversee its operations and work toward lifting the loan suspension. 

A number of board members resigned after the order was issued, while the remainder were set to resign upon the appointment of a restructuring officer, according to documents on Alvarez & Marshal's website. 

"In seeking the appointment of a restructuring officer, PBCF's intentions are to make the changes necessary within PBFC to ensure that PBFC is best positioned for continued operational success going forward, ideally with the support of the ministry and lenders," Ankermann wrote in the affidavit.

Alvarez and Marsal consultants are now acting as if they were the PBFC board and staff while they handle business affairs, according to a statement from Alberta Agriculture and Irrigation.

According to information posted to Alvarez & Marshal's website, PBFC owes a little more than $281 million to its lenders under the credit agreement, which it says is approximately the same amount the PBFC lent to its members.

As of Aug. 31, 2024, the PBFC had a total of 227 active and inactive members, according to Ankermann's affidavit.

According to information posted to Alvarez & Marshal's website, a letter was delivered to the cooperative that stated the inspection and investigation section of Alberta Agriculture and Irrigation conducted inspections of PBFC between Sept. 7, 2023 and May 15, 2024.