This is an inventory financing program where Producers Livestock Credit Corporation (PLCC) will finance the farmer's iso-weaned/weaned pigs or purchased pigs at market value or purchase price.
PLCC may also advance up to 70% of the finished hog value under certain conditions. The farmer should have the barn space, management ability and the ability to provide for the care and the feeding of the pig/hog until sold. As the hogs are sold, PLCC will advance to the farmer and his lender the equity of the hogs sold providing the remaining value of the hogs on the contract has not declined to the point where there is no equity left in the remaining hogs. If the farmer needs assistance in the feed cost, PLCC may advance up to 70% of the value of the finished hog as long as there are hedges in place or a cash flow contract.Example:
If an iso-wean feeder pig cost $35 and the finished hog is hedged at $0.60 carcass wt and the finished wt is 265lbs, PLCC could advance up to 70% of the sale price which would be $82.32 (265lb x.74% = 196lbs x $0.60 = $117.60 x 70% = $82.32). Since the original cost was $35 less the maximum available of $82.32 PLCC could advance up to $47.32 for feed. Half of this would be advanced when the pig reaches 120 lbs and the final advance would be when the pig weighs 220lbs. However, the death loss will affect the original cost of the pig. PLCC would also require monthly inventories by barn to be sent to the PLCC office.
Territory East of Des Moines, Iowa
Territory West of Des Moines, Iowa