In light of recent scandals where banks were defrauded tens of millions of dollars due to “ghost cattle”, more and more banks are implementing better collateral verification processes. One step in this direction is improving livestock counting processes by using drones.
In a test that CattleQuants performed to evaluate how accurately people can estimate cattle numbers, cattle owners consistently underestimated the number of cattle on a ranch, sometimes by as much as 30%. Bankers and accountants, who are not used to being around cattle, were often more than 50% off from the true herd numbers. In other words, a herd of 2500 animals on a ranch may be indistinguishable from a herd of 3500 and even 4000. And a lot of 300 cattle in a feedlot pen may be indistinguishable from a lot of 350 or even 375 head of cattle. That means that bank representatives eyeballing cattle for collateral verification purposes might think they saw a lot more cattle than are actually present. That’s not great collateral verification.
Whereas traditional livestock collateral verification relies on the inspector’s expertise in correctly estimating cattle numbers, drone-based inspections provide the bank’s appraisal team with an accurate cattle count 100% of the time. By sending up a drone to capture individual photos of each feedlot pen, or each pasture where cattle are present, and applying AI to automatically detect and count the cattle, CattleQuants is able to guarantee at least 99% accuracy on their livestock collateral verification reports.
Drone-based inspections also facilitate a complete count of livestock collateral even when that collateral is present at multiple locations–even in multiple states. By relying on their network of drone pilots who are local to the region(s) where the collateral is located, CattleQuants can inspect as many as 5-10 facilities all on the same day. This can be useful for inspecting cattle for a feedlot corporation that owns multiple feedlots or for a rancher who custom feeds his or her cattle at several different feedlots. Drone-based inspections also provide the opportunity to easily inspect high risk collateral on a frequent (i.e., quarterly) basis or on short notice.
Drone-based inspections take the guesswork out of collateral verification, thereby mitigating the risks associated with chattel-backed loans. Contact email@example.com or call 216-414-4588 to find out more about the process or to schedule your next cattle inspection.