Which Cow Is the Collateral?
A lender asks which of my cows is the collateral, and thirty minutes later the entire herd has opinions about its title.
When I was first starting out in the dairy business, I took out a small equipment loan, and the young loan officer arrived at my barn with a clipboard and a very serious expression. He needed to identify the collateral, he said, and he asked me to point it out. I thought he meant the milking machine. He meant the cows.
Now I have always named my cows, and I have a habit of naming them after pieces of paper. I had Deed, Escrow, Amortization, Lien, and a Guernsey I called Prime Rate, because she moved up and down on no schedule I could determine. When the officer asked me to read the names off, he stopped writing at the third one and just listened with his pencil in the air.
He wanted to know if any of them were the kind that might be pledged. I told him Lien was off limits, and he said that was not how it worked. I said I understood how a lien worked, and he said then he did not understand my cow. We went back and forth like that for a good half hour while the entire herd stood at the fence and watched, which was a bit unnerving.
In the end we decided the collateral would be the milking equipment after all, and the cows would be named separately in an appendix. He labeled the appendix 'Animals, Named,' which I think is the only appendix in the history of the bank that had a heading with feelings in it. I framed the carbon copy and hung it by the milk house door.
That officer is a regional vice president now, and every time he comes by, Prime Rate walks over and leans on him, like she remembers. If you are curious how real dairy herds get counted and managed, there is a very practical guide on dairy herd management, and you do not need to name any cows after paperwork. I tell more of these on farm.FM.
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