The Live Cattle Marketing Committee of the National Cattlemen's Beef Association (NCBA) is forming a task force to investigate solutions to the financial risks highlighted by Eastern Livestock Company's bankruptcy.
The committee also directed NCBA staff to work on getting a congressional oversight hearing into the Grain Inspection, Packers and Stockyards Administration handling of its auditing and bonding responsibilities.
After Eastern's bank accounts were frozen last fall, the cattle brokerage which bought and sold cattle around the country collapsed. GIPSA stated that Eastern owes more than $130 million to 743 sellers in 30 states. Fifth Third Bank has also alleged Eastern may have had as much as $2.5 billion in fake transactions in which no cattle were actually traded.
The cattle brokerage's bankruptcy shined a bright light on issues within the industry -- checks, paperwork and regulation -- and the number of people hurt by the failure makes those issues hard to ignore, NCBA Chief Economist Gregg Doud said.
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