"Contract squeeze worries farmers " is the WP headline

[farmboy44]

Is it in the contract that you have to buy back what they sell if you breach?

It would absolutely be In the terms.

I’m not trying to be rude I’ve appreciated your contributions here for years - but is it really that hard to comprehend?

I agree to buy a new truck for 50000. We sign a contract to that effect. It’ll be delivered in a month. A month comes by and guess what, there is a sale in at the dealership and now the truck is worth 45000. Should the dealer owe me 5k? Is he the bad guy for saying a deal is a deal? Should I be like others on here and say I’m never doing business with them again if they don’t give me a better deal than the one we both agreed to?

[the big wheel]

Which party is nullifying the contract? If you cancel your mortgage does the bank pay you a penalty? If the land market crashes should the bank reimburse you for lost unrealized gains?


And we wonder why city folk perceive us as complainers

Which grain company you work for?

It all comes down to being rigged so the risk is always ours.
And that has become acceptable. If city folk actually were told and
And understood how we are footing the risk bill
While everyone in between bares none they wouldn’t
Be perceiving us as complainers they’d want some
Hides taken off the manipulators at the top.

[blackpowder]

Actually, it took me 3 different teachers before I was able to grasp the concept of selling paper without owning the item.
Commodities, stocks, options whatever.
Could you run the books for a multinational? Then why are you farming?
Every generation has learning opportunities.
The books may not necessarily be bushel for bushel 0 $ difference at the close of every day, but you can bet they don't speculate much if at all.
Wheat, corn, beans much easier sourced than Copper, coffee or OJ.
I don't understand it all.
Apparently we could all it understand better.

[Blaithin]

It would absolutely be In the terms.

I’m not trying to be rude I’ve appreciated your contributions here for years - but is it really that hard to comprehend?

I agree to buy a new truck for 50000. We sign a contract to that effect. It’ll be delivered in a month. A month comes by and guess what, there is a sale in at the dealership and now the truck is worth 45000. Should the dealer owe me 5k? Is he the bad guy for saying a deal is a deal? Should I be like others on here and say I’m never doing business with them again if they don’t give me a better deal than the one we both agreed to?

Maybe I’m just not being clear about what part is hanging me up.

When they contract grain, it’s on their books. They are under no obligation to contract their books out as sales, correct? Just like farmers they browse the field and find a buyer and sign a contract for a price.

Just like farmers running the risk their production will fall through, companies would have that same risk. It could fall through. They probably have a large amount of insurance for such a scenario as then they’d be in breach of their contract.

So why do farmers have to pay for the companies breach as well as their own?

In no way am I saying farmers shouldn’t have to pay if they forward sold. But if companies also forward sold at a higher price, why do farmers pay for that. That is not their contract.

In your dealership scenario, if something happened in that month where the dealer had to spend another 10K on the truck, you would not expect to have to pay an additional 10K on top of the 50, would you? Not if your contract was for 50. That’s something the dealer has to eat.

IF it’s in grain contracts that farmers are also on the hook if their breach causes the company to breach then yeah, they’re paying the extra. I don’t know what’s in a grain contract.

Probably the most times I’ve typed out breach, ever.

[farmboy44]

Which grain company you work for?

It all comes down to being rigged so the risk is always ours.
And that has become acceptable. If city folk actually were told and
And understood how we are footing the risk bill
While everyone in between bares none they wouldn’t
Be perceiving us as complainers they’d want some
Hides taken off the manipulators at the top.

Lol yep. Come on a marketing forum and actually try to educate some people on how marketing works and I must work for a grain company.

I just can’t stand guys not being accountable for the decisions they made. Same as if you locked in fert for spring and the price goes up after, do you share the risk on that? Pay a little more come seeding despite the contract?

Give me a break. If you actually took some time you’d realize you actually have the opportunity to learn here but instead you just complain

[jazz]

I think any farmers who are out on a contract will find an easier time negotiating with their lender for a principal skip to throw at buyouts than getting a fair shake from our grain companies.

These guys probably know there is a govt top up to one of the programs that will go right into their coffers as well.

[farmboy44]

Maybe I’m just not being clear about what part is hanging me up.

When they contract grain, it’s on their books. They are under no obligation to contract their books out as sales, correct? Just like farmers they browse the field and find a buyer and sign a contract for a price.

Just like farmers running the risk their production will fall through, companies would have that same risk. It could fall through. They probably have a large amount of insurance for such a scenario as then they’d be in breach of their contract.

So why do farmers have to pay for the companies breach as well as their own?

In no way am I saying farmers shouldn’t have to pay if they forward sold. But if companies also forward sold at a higher price, why do farmers pay for that. That is not their contract.

In your dealership scenario, if something happened in that month where the dealer had to spend another 10K on the truck, you would not expect to have to pay an additional 10K on top of the 50, would you? Not if your contract was for 50. That’s something the dealer has to eat.

IF it’s in grain contracts that farmers are also on the hook if their breach causes the company to breach then yeah, they’re paying the extra. I don’t know what’s in a grain contract.

Probably the most times I’ve typed out breach, ever.

I get your point on shared responsibility as it goes up the food chain, but ultimately causation C or B doesn’t happen if causation A doesn’t occur

Ultimately we are responsible to grow it. If we could elevate it and ship it and sell it to foreign buyers the risk weighting would be a lot different

I don’t disagree that we take on more risk than anyone, that is obvious (farma once said you’d have to be insane to do this… maybe he was right). But I run a business and am aware of all the risk and reward related to the business decisions I make. My problem is when others who make the same type of decisions feel they should get compensated when things don’t go there way, when us who didn’t make those mistakes see no additional benefit

[farmboy44]

I fully understand that it's a tough spot to be in but I would be kinda pissed if the gov steps in to help guys out of contracts. If I have a contract that I can fill but the price has gone up are they gonna compensate me too? It's pretty well the same financial impact.

100% agree

[blackpowder]

I wonder if the fluency level a sign of our being held back for 80 years.
By the way Farmboy, don't get too cocky young fella, your day's coming.

[farmboy44]

I wonder if the fluency level a sign of our being held back for 80 years.
By the way Farmboy, don't get too cocky young fella, your day's coming.

While I haven’t been called young fella for a while, you are absolutely right. We all will have good years we all will have bad years.

Just remember - the riskier the decisions you make, the more risk you take on - the quicker that day will come.

[blackpowder]

😆
And I wish I had been better educated when I started.
Course, too much and I either wouldn't have started or quit soon after lol.

And Blaithin, don't be too concerned about old farts.
There are some excellent articles and or books that explain the function of futures markets.
There may be 6 paper bu traded for every 1 physical. It's a zero sum game. Designed for price discovery and protection. Chaos without.
As Gco buys your bu at $7, it sells the obligation to deliver to someone else at $7 and so on and so on. Removing their price risk.
By last trading day of the futures contract, everyone is out who doesn't want to stand for delivery in Minneapolis or wherever. Rarely happens but the threat keeps the contracts alive.
You get out of your sell obligation by delivering or buying. As does everyone else the instant and at the price you do.
They hedge currency exchange risk same way.
As buying back the paper we obligate to sell often not cheap, we ' speculate ' without the bu in the bin. Pigs get slaughtered is the saying.

[Old Cowzilla]

Dammit I'm going to try filling my $12 canola contract anyway don't give a hoot what the BTOS do . Thats still better than the loads of $ 10 stuff I sold last year guess I am a glass half full kinda guy.

[the big wheel]

Lol yep. Come on a marketing forum and actually try to educate some people on how marketing works and I must work for a grain company.

I just can’t stand guys not being accountable for the decisions they made. Same as if you locked in fert for spring and the price goes up after, do you share the risk on that? Pay a little more come seeding despite the contract?

Give me a break. If you actually took some time you’d realize you actually have the opportunity to learn here but instead you just complain

If you want we could meet I could give you more than break!
Your a smartass done with smart assess benefiting off us.

You don’t fool me for a minute. Likely the guy posting on
Facebook that got called out and found out was a
Grain marketer. Your job relies on all of us buying into thinking
We need the current system we don’t it needs to be
Simplified. This reminds me of the accountants designing agristability
It’s made more for them to have work than it does to be
An effective program.
You haven’t asnswered my question why did you elevator people
Mis state last years canola crop? Every farmer in the country got screwed
And every buyer got cheap canola at our expense.
The other problem with our system is you tell me an elevator
That doesn’t preach if you don’t have a contract you won’t
Be able to sell? Why is that? The reason is they then have
Tools to make money off our need to sell at harvest and these
One sided contracts.

[dmlfarmer]

No, be on the hook for $11, buy out the $11 if you don’t deliver. Why do you have to buy out for the company too? It’s a risk for the farmer to forward sell which means it’s a risk for the company to forward sell. Why don’t they foot that risk like the farmer does?

Blaithin, You are getting hung up on grain companies role as middlemen. Consider if that buyer mr farmer sold to is a a feedmill. They expect delivery of the contracted number of bushels in a specific time period for that $11.00. If farmer does not deliver the contract they have to go to the market and purchase those bushels for the “$20.00 market price. Why should the the mill have an added $9.00 cost per bushel to meet their needs they had covered with the contract. No different for an export company. They expect delivery for the agreed upon contract and it is not the company fault if the producer defaults

The point is it is the farmer who took the risk selling something he did not have and had no guarantee to getting.

Furthermore selling physicals is not the only option farmers have to lock in price or profit

[the big wheel]

Blaithin, You are getting hung up on grain companies role as middlemen. Consider if that buyer mr farmer sold to is a a feedmill. They expect delivery of the contracted number of bushels in a specific time period for that $11.00. If farmer does not deliver the contract they have to go to the market and purchase those bushels for the “$20.00 market price. Why should the the mill have an added $9.00 cost per bushel to meet their needs they had covered with the contract. No different for an export company. They expect delivery for the agreed upon contract and it is not the company fault if the producer defaults

The point is it is the farmer who took the risk selling something he did not have and had no guarantee to getting.

Furthermore selling physicals is not the only option farmers have to lock in price or profit

Blaithlin is 1000% correct!

What a happening is grain companies are forcing us into contracts or you can’t sell
When there are more contracts the market becomes stable for buyers when
The market is stable for buyers the idea of uncertainty for them
To get product means prices get driven down.
We ve all bought into this buckshot way by people who
Are creating their own work that we pay for.