Selling barley

[cowman]

Do you ever get worried selling barley to feedlot alley? The word is a lot of the feedlots are fairly shaky and could go down fairly fast. I would think it might be prudent to have the check in the bank before the B-train is loaded or at least by the time it gets on the scale?
I remember we used to sell feed barley with a 90 day payment(with some interest of course) and we never got burned, but I also remember when a local grain company went down a lot of guys got burned. How do you protect yourselves from getting the shaft in todays feed market?

[parsley]

Make a contract with $xxx.00 due at delivery, and the rest payable by a specified date. Don't unload if the money is not paid, as previously agreed, at delivery time. Only grant credit on what you can afford to lose.

No sense two parties losing all.

Parsley

[TOM4CWB]

Cowman;

This is a case where risk management may require a broker in the middle... who is willing to take the risk.

This may even be done through the WCE Western Barley futures... by actually delivering against these futures contract.

Prudent risk management is important... ESPECIALLY if you do not have a very close working relationship with the seller!

ASK the hard question.... do you and your neighbours know the organisation well enough to deposit $100,000.00 cash with them... in crisp new $20's... and be assured you will get all your money back in 3 months... when your cheques are cashed?

Barley is no different than 20 dollar bills!

[TOM4CWB]

Seller;

In this case, the grain purchaser (feedlot) should be looked at in the light of being...

a seller of credit...

which the grain supplier is purchasing.