New OSF funding program could help shepherds expand flocks

Ontario Sheep Farmers (OSF) wants to support flock expansion and has begun a first-of-its-kind financing program in partnership with Scotiabank. 

Previously only available for cash croppers, the Scotiabank Yield More Financing (YMF) program is now available for Ontario shepherds. 

Why it matters: The funding is designed to provide shepherds with the cash flow needed to expand production.

The Scotiabank YFM program provides shepherds who have two years of experience in the industry with up to $50,000 in a revolving line of credit to buy ewes and feeder lambs.

“When we started talking to Scotiabank about this program, we were excited that it could provide a suite of tools for farmers who want to expand their production,” said Jennifer MacTavish, OSF executive director.

Without financial options, sheep operations and new sheep producers, in particular, were forced to sell ewe lambs to bolster cash flow, reducing their ability to increase production and flock size.

“We know our members are eager to expand their operations because of the optimism and opportunities in the sheep industry for meat, dairy and wool,” said OSF chair John Hemsted.

The YFM program, which opens yearly on Sept.1 and ends Aug. 31, provides up to an 18-month term before full payment is due, said Eleni Ladacakos, Scotiabank’s senior client relationship manager. 

While $50,000 per producer is available, she said applicants don’t have to access the entire amount in one year. It could be spread over two YFM periods.

“For example, if a producer applies for $20,000 now and fully draws the $20,000 on Sept. 1, 2022, that amount won’t be due until Feb. 28, 2024,” said Ladacakos. “They can apply for an increase of $30,000 and draw that $30,000 Sept.1, 2023, and that amount won’t be due until Feb. 28, 2025.”

The Ontario sheep industry now faces a scenario where producers, particularly those new to the industry, clamour for financial tools to expand production but are equally challenged to find new stock to purchase.

Lamb prices are softening and the cost of production is trending upward so it may seem counterintuitive to expand a herd, said MacTavish. The introduction of this funding could make it a prime time to grow Ontario’s flock. 

 “You almost want to keep animals back and expand your production now and take advantage of funding like this,” she said. “So, when the lamb prices go up again, you have more lambs to market, making more money.”

Alternatively, producers who hold back ewe lambs can sell them for breeding stock or send them to market.

“We are diversifying the market for ewe lambs,” MacTavish said. “We are under no illusion that this program will solve our problems around expansion but it’s another tool to help our farmers.

“It will work for some farmers. It won’t work for others. That’s OK. But what matters is that our farmers now have a program they can access.”