Also known as: farming operations
Written by attorneys · grounded in primary & secondary sources — see below
An activity consisting of raising, cultivating, propagating, fattening, grazing, or any other farming, livestock, or aquacultural operation.
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Francois Fortier buys cattle from a seller who borrowed against the herd to finance feed purchases. The lender's security interest was perfected. Because the seller was engaged in a farming operation, Fortier does not take the cattle free of the lien even though he paid value and bought in ordinary course.
Francisco Frost plants wheat on leased acreage and grants a security interest in the crop to a lender. The wheat qualifies as farm products because Frost is engaged in a farming operation and the goods are crops grown on the land.
Flora Ford purchases seed and fertilizer on credit for use on her acreage. The supplier's interest attaches to those inputs because they constitute supplies used or produced in a farming operation.
A buyer in ordinary course 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 lender's interest in collateral produced through farming activities.
Supporting sources
Goods qualify as farm products when the debtor is engaged in a farming operation and the goods are crops, livestock, supplies used or produced in the operation, or unmanufactured products of crops or livestock.
Supporting sources