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Tyson Foods Inc.’s beef-producing unit has asked a judge to appoint a bankruptcy trustee to run Easterday Ranches Inc., which filed for chapter 11 protection after the food company sued it for alleged fraud, WSJ Pro Bankruptcy reported. Tyson said restructuring professionals who recently took over Pasco, Wash.-based Easterday allowed a significant land sale to go through just before its Feb. 1 bankruptcy filing. Much of the money from the $16 million sale of the feed lot went to pay professionals and insiders of the family-run operation who had steered the business into trouble, according to Tyson, Easterday’s sole customer. Tyson said that it is out roughly $200 million it funded Easterday to feed cattle that didn’t exist, adding it was forced to come up with more money last week to keep 54,000 cattle actually on Easterday’s ranch from starving. The push for a bankruptcy trustee from one of the country’s largest meat producers takes aim at alleged actions involving restructuring adviser Paladin Management Group, a consulting firm that works with distressed businesses. Paladin failed to prevent the land sale, according to Tyson’s motion calling for a trustee, which was filed Monday in U.S. Bankruptcy Court for Spokane and Yakima, Wash. A spokeswoman for Paladin said Easterday will respond to the motion at the appropriate time, adding the company doesn’t believe the appointment of a trustee is in the best interests of the estates.

The Washington Department of Agriculture has launched an investigation into how 200,000 cows at the center of a massive fraud allegation against a Pasco ranching operation may have slipped through its inspection process, the Spokane Spokesman-Review reported. The ghost herd is key to a legal fight between Tyson Foods Inc. and Easterday Ranches Inc., which on Monday filed for chapter 11 protection. The Easterdays, one of the largest farming and ranching families in the state, claims in court filings it owes more than $236 million to its top 20 creditors. The Pasco, Wash.-based ranching and feedlot operation is seeking to reorganize using chapter 11 federal bankruptcy law amid allegations by Tyson Foods Inc. that the ranch illegally charged the food company for 200,000 cattle that never existed. Court records released yesterday disclose that the family-run operation faces a mountain of debt that could have a major trickle-down economic impact on veterinarians, farmers, truckers and parts stores that support the Easterday operations. The legal case brought by Tyson describes a modern-day cattle rustling operation that was carried out on paper rather than by masked, horseback villains riding off with a stolen herd. Robbie Parke, manager of the state’s Livestock Inspection Program, said a check of records provided by Easterday Ranches Inc. to the state shows no evidence of a missing herd. “What we can see from our records is that the same number of cattle we inspected” arriving at Easterday’s Pasco feedlot match the records that Easterday provided indicating that it was shipped to slaughter. If Tyson Foods’ allegations of fraud are correct, the scam would be on an unprecedented scale, Parke said. Parke said that the state has launched an audit of all of Easterday’s records to try to rectify what it submitted versus the allegations Tyson has made.

The Biden administration will provide debt-relief measures for more than 12,000 financially distressed farmers, Bloomberg News reported. The U.S. Department of Agriculture will temporarily suspend past-due debt collections and foreclosures for farmers borrowing under two major loan programs administered by the Farm Service Agency, administration officials said. The measure is designed to help farmers hit by the coronavirus pandemic and economy’s slump with about 10% of borrowers qualifying. “USDA and the Biden Administration are committed to bringing relief and support to farmers, ranchers and producers of all backgrounds and financial status, including by ensuring producers have access to temporary debt relief,” Robert Bonnie, the department’s deputy chief of staff, said in a statement. The government is evaluating ways to improve and address borrowing to keep farmers “earning living expenses, providing for emergency needs and maintaining cash flow,” Bonnie said. The USDA will temporarily suspend non-judicial foreclosures and wage garnishments and halt referring foreclosures to the Justice Department. The department will also seek to stop foreclosures and evictions already in progress. The administration plans to keep the debt-relief measures in place until the COVID-19 emergency ends, the officials said.

A shaken U.S. agriculture industry already “stressed” by a profitability squeeze in a pandemic year may see little relief in 2021, according to a survey of industry lenders, Bloomberg News reported. Agricultural lenders reported that “just under” 51 percent of their borrowers were profitable this year and about half those lenders don’t expect borrower profitability to improve next year, according to the Fall 2020 Agricultural Lender Survey from the American Bankers Association and Federal Agricultural Mortgage Corporation, also known as Farmer Mac. That’s down from 2019, when lenders said about 57 percent of borrowers were profitable. Almost a quarter of lenders expect bankruptcies to increase this year, similar to 2019, though 57 percent expect a rise next year due to a marked increase in strain. Such a view “may be due to expectations that the damages of 2020 will take time to lead to bankruptcies, uncertainty in government program support, and expectations for weak markets in 2021,” the report said.

The U.S. Agriculture Department on Friday released details of a second round of COVID-19 aid for farmers, which will pay up to $14 billion to growers of major crops such as corn, soybeans and wheat, as well as livestock, dairy and tobacco, Reuters reported. The aid follows a $19 billion relief program announced in April to help U.S. farmers cope with disruptions to the food supply chain and plummeting demand from restaurants during the pandemic. Less than $10 billion has been paid out to date. The administration has been criticized for the $28 billion spent over 2018 and 2019 to compensate farmers for lost sales during a tariff war with China. The new aid package will largely be funded by the Commodity Credit Corp, a Depression-era program created to support farm income. Funds from the corporation do not need to be approved by Congress. The USDA also said that up to $100 million in aid for tobacco farmers will come from the Coronavirus Aid, Relief, and Economic Security Act. 

U.S. President Donald Trump yesterday announced a new round of pandemic assistance to farmers of about $13 billion at a campaign rally in Wisconsin yesterday, Reuters reported. The new aid program — which the agriculture department is expected to release details about today — is tapping into the $14 billion in additional Commodity Credit Corporation funds that Congress agreed to prepay as part of the Coronavirus Aid Relief and Economic Security (CARES) Act. Farmers are expected to be allowed to start applying for the new program on Monday. How much certain crops will receive is not known, but the program is set to make direct payments to producers of meat, dairy, grain, vegetables and other products. The payments will be designed similarly to an earlier aid package: calculated based on yields of crops and the impact the coronavirus pandemic had on the price of the commodities. Trump in April announced a $19 billion relief program to help U.S. farmers cope with the impact of the virus, including $16 billion in direct payments to producers and mass purchases of meat, dairy, vegetables and other products. That came on the heels of $28 billion in trade aid given to the farm sector over 2018 and 2019. A government watchdog agency said on Monday the 2019 aid favored farmers from the U.S. Southeast, primarily those growing crops like cotton or sorghum, over those in other parts of the country.