Protect Yourself from Mortgaged and Stolen Livestock
Reprinted with permission from Hartford Livestock.

Once you have identified the state, follow these steps.

For livestock received from a state using the Central Filing System:

• Check your current Central Filing System list from the applicable state to verify it lists the livestock seller. Your insurance policy requires you to register for receipt of updated lists for each Central Filing State from which you receive livestock.
• Any livestock received from distant states should raise a red flag. Contact that state’s Secretary of State Office, and ask for a lien search with results provided to you in writing.

For livestock received from ANY state:

• Check your records for any written notice of a security interest in the livestock. Your insurance policy requires you to file and maintain these written notices. Also, act reasonably on any oral notice or your own direct knowledge of the existence of a security interest and/or a lien holder.
• If the livestock seller’s name appears in the Central Filing System or on a Direct Notice, you must follow the payment instructions for the applicable security interest. All lien holders must be listed on the payment, and one lien holder cannot take the place of others.
• A check should not be made payable in a name different than the name used to bill the livestock into the sale or on an applicable lien.
• Do not rely on a livestock seller saying the livestock are free of liens or that an existing lien was removed. Only rely on written notice directly from the lien holder to confirm that a lien has been removed.
• Pay attention to reports of stolen livestock, and be aware that there is a chance you will see those stolen livestock in your business. These reports may come from a variety of sources including the media, police, other producers, other government agencies, insurance agents or companies, etc.
• Use common sense and be aware of any red flags, including individuals who sell livestock:
  • Under an assumed name to avoid a lien holder. An example could be somebody named Joe Jones suddenly using the name JJ Cattle Company.
  • Under a family member’s name.
  • At a market or dealer outside of what is, or should be, their normal trade area.
  • At a distant market with no prior inquiry to you or your employees.
  • At an offered and/or accepted price that is below the market price.
  • Who seem to have no visible means to support the production of livestock.
  • When you are suspicious of the transaction for any reason.

Protecting your business and yourself from the risk of unknowingly being involved in the illegal sale of mortgaged or stolen livestock is very important. We cannot guarantee that these steps will always work, but we are certain that they will help if followed by you and your employees.

Return to Cline Wood Agency Transportation and Agribusiness Review, Summer 2009