Also known as: farm product
Written by attorneys · grounded in primary & secondary sources — see below
Goods other than standing timber with respect to which the debtor is engaged in a farming operation. The category includes crops grown growing or to be grown, livestock born or unborn, supplies used or produced in a farming operation, and products of crops or livestock in their unmanufactured states.
Fernando Farrell sells his soybean crop to Frontier Capital, a grain elevator. A bank holds a perfected security interest in the soybeans as farm products. Frontier Capital buys the soybeans knowing of the bank's interest. The bank retains its security interest because the buyer exception for ordinary course purchasers does not apply to farm products.
Atlantic Garage plants soybeans on land next to its assembly plant to test bio-based materials. The soybeans remain growing at the time of default. Because Atlantic Garage engages in cultivation, the soybeans qualify as farm products rather than inventory or equipment.
Select any source to read its text and confirm it supports the definition.
Kenneth operates a farm and a separate supply business. He stores irrigation pumps in a warehouse for sale to neighboring farmers. The pumps are inventory because they are held for sale and are not farm products used in Kenneth's own farming operation.
Summit Maritime raises fish and vegetables on an island outpost. A full-time caretaker tends the pens and plots. The fish and vegetables qualify as farm products because Summit Maritime engages in raising and cultivating even though the goods primarily feed its own crew.
Kenneth maintains a herd of pregnant dairy cows and an aquaculture operation. The unborn calves and hatchlings are farm products because the definition expressly includes unborn young of livestock and aquatic goods produced in aquacultural operations.
Pioneer Feeds supplies feed on credit to hog farmer Carl Mason. A state statute grants Pioneer an agricultural lien on the hogs. The lien attaches to farm products and is governed by Article 9 priority rules against a later perfected security interest.
A buyer in ordinary course of business takes free of a security interest created by the seller except when buying farm products from a person engaged in farming operations. The exception preserves the secured party's interest even if the buyer knows of the security interest.
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Raising, cultivating, propagating, fattening, grazing, or any other farming, livestock, or aquacultural operation satisfies the requirement. The definition focuses on the debtor's activity with respect to the goods rather than the debtor's primary business or profit motive.
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Yes. Unharvested crops grown through cultivation qualify as farm products even when the debtor's overall business is manufacturing and the crops supply raw material for that business. The statutory definition turns on the farming activity, not ultimate use or scale.
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An agricultural lien is a statutory nonpossessory interest in farm products that secures payment for goods or services furnished to a farming operation. Article 9 governs its perfection and priority even though the lien arises by statute rather than by agreement.
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…an agricultural state. A little more than one half of its people live on farms. At the time this law was passed the prices of farm products had fallen to a point where most of the persons engaged in farming could not realize enough from their products to support their families, and pay taxes and interest on the mortgages on…