Heads up on contracts.

[furrowtickler]

It's amazing that the line companies can delay the acceptance of delivery for months beyond the contracted delivery month without recourse, but guys short on their contracts start paying interest immediately.

You absolutely have a great point
It’s absolutely ridiculous what’s going on

[jazz]

I didn’t say that, Jazz. These 2 instances just said the shortage was applied against their account. Don’t know if they asked earlier or not. Really, I don’t care. Applying the cost to their chemicals account is wrong. .

Totally agree its wrong. I just hope people are talking is all because there are going to be a lot of tough conversations all around after this yr.

I have only ever walked on one contract in all my yrs farming and it was because they downgraded me just as I started hauling. I walked on that and dared to them to sue me. They never did.

The grain companies could easily roll these contracts out a couple months to see if excess grains come in from the better areas which are still a month away.

[furrowtickler]

Totally agree its wrong. I just hope people are talking is all because there are going to be a lot of tough conversations all around after this yr.

I have only ever walked on one contract in all my yrs farming and it was because they downgraded me just as I started hauling. I walked on that and dared to them to sue me. They never did.

The grain companies could easily roll these contracts out a couple months to see if excess grains come in from the better areas which are still a month away.

So what’s the difference really ? You were not happy with the outcome . At the end of the day it comes down to a dollar value right ?

BTW I agree with what you did

[BreadWinner]

I’m not sure companies can charge this onto your fcc or input account, for one they are not selling you a product or something you can take delivery of. They would need you to sign a invoice to charge it to your account. I don’t think FCC or any other bank would allow this loss to be downloaded onto them.

[LEP]

I’m not sure companies can charge this onto your fcc or input account, for one they are not selling you a product or something you can take delivery of. They would need you to sign a invoice to charge it to your account. I don’t think FCC or any other bank would allow this loss to be downloaded onto them.

I agree. Companies are itching to set an example of someone so can set the tone. I don’t think FCC wants to carry their water.

[beaverdam]

I'd be surprised if there were many contracts for Aug delivery on a New Crop DDC(maybe it's just my geographical area, but contracts here would usually be Sept or Oct) so it seems early that companies would be dropping the hammer on farmers as it's only Aug 10th, still 20 days to fill an Aug delivery.

Still, what is stopping any farmer from finding wheat on their own from a better area, or from a non contracted producer, to fill their shortfall. Or have a broker find grain for them?

If this is simply about getting out of filling your contract that you willingly signed, and you knew there was no "Act of God" to protect your production from hail or drought, frost or pests,,, then I'm not on board.

Did you hedge your contracted volume with a futures position??? if you did, then you should have money to offset the cost to buy grain or to pay the penalty?

[jazz]

The grain cos are likely creating this squeeze on purpose. Forcing forward contracts in early and holding near futures down so the guys with potential uncontracted excess grain wont sell it right away.

Looks like a shake down to me.

[jamesb]

In my observation this fall in this discussion of the seemingly poor negotiation that exists for many. Its a real shame of the tact that is taking place by many. IMO the unwillingness to reach a agreement that will not create a bigger mess that what already exists with the drought itself. A deal is a deal and at some point this year or next the contract has to be honored. Over the years there has been a lot of contracts rolled to forward delivery periods (for a cost mind you). I expect that there is going to be irreparable harm to many long term relationships between grain co's and farmers from a unwillingness to reach a amicable arrangement. Forward contracting will be changed for a long time by most, especially those affected by penalties. I can envision the young CSR's of many of the elevators will find that until this situation becomes a distant memory will find a unwillingness by many farmers to forward contract without a AOG clause of some kind. Those AOG contracts are out there and will have interest by many. They are like an insurance product and will have a cost per tonne.

[GOODRUM]

what would the cash value of unfulfilled contracts be? Tally them up and bribe the media to report it, appeal to the bleeding hearts for sympathy is about the only way , pressure applied to grain cos through the media will get results , individual negotiations will be basically ignored.

[dmlfarmer]

what would the cash value of unfulfilled contracts be? Tally them up and bribe the media to report it, appeal to the bleeding hearts for sympathy is about the only way , pressure applied to grain cos through the media will get results , individual negotiations will be basically ignored.

Bad plan. The first question the media will ask is why did mr farmers sell something they did not have and with no guarantee of getting. Any one else doing that would be considered a scammer.. farmers will come out looking greedy, unreliable and poor managers. Many urbanites already have that opinion so why encourage media to amplify it.

Farmers should be talking up drought and the economic costs of it every chance they get but to focus attention on infilled contracts that farmers signed before knowing they would get a crop will backfire.