selling verses collecting

[wmoebis]

I sold feed grain to a hog barn this year, they operate 16 barns. Since I delivered the company has entered into a forebearance agreement with secured creditors. Thus we(unsecured creditors) can't be paid. According to their legal web site there is up to 1000 of us to this 1 company alone. I was wondering how big of a problem this is with other buyers/sellers. With the troubles in all livestock industry do others have a lot of outstanding production they are having trouble collecting on.

[WRAPper]

I had a talk with one of the good people from the CGC at the Wild Rose Annual meeting. I think it's about time that farmers start writing letters to the cgc to get after them to develop either a form of self insurance or to develop a bonding system for grains sold to non-traditional large volume users when you take time to look at some of these "larger" domestic users and the value and volume of grain that is purcahsed by them there are huge dollars there. As well as getting more serious about enforcing bonding regs that are already in place. Is this something for Wild Rose to persue on behalf of Alberta farmers or is it best left as a traditional "handshake" agrreement? And or is it a place for the Alberta grain commission. I'd like to hear some thoughts on that as well.

[melvill]

wmoebis, one thing I'd be interested in is this: do you have any notion how far behind this company is in paying feedgrain producers for grain. In other words, did feedgrain producers deliver five or six loads before payment wasn't made of did they deliver one or two loads and notice that payment wasn't coming.

This issue is becoming more important as time passes. I regularly hear of barley growers not being paid for grain. Usually growers are requesting payment immediately so that if that doesn't happen individuals, at least, have a warning that something is wrong before many loads are delivered.

[melvill]

I reread my last post. "Regularly" doesn't mean often. It means regularly once or twice times a year, not once a month or more. In terms of the total amount of feed deliveries, it's not usually big volumes but it certainly hurts the individual producers.

Does anyone know anything about an Ontario kind of 'self-insurance' program to help out with this sort of thing?

[wmoebis]

Most guys I have heard of make a deal for a bin full or so at a time. They want to empty a whole bin. The company runs each barn on it's own so it would depend on the barn how fast payment was coming. Usualy you phoned ahead and they told you aprox. how long it would take. Then you made up your mind whether you wanted to deliver. These barns are in small communities where they may be one of the only close markets for feed grain.
The problem is if the local producers miss out or don't accept their terms they just go to brokers out of the area and get grain from them who in turn get it from you. We get less from the broker than directly from the barn and then take the risk of the barn and /or the broker going broke.
Since this has come to light I have heard of guys that are owed for feed since a year ago OCT. (15 months)

[cropduster]

Lee,and others,the Western Barley Growers are working at formulating a type of `clearing house` for all ag commodities for these type of situations.It is still in infancy stage but is moving forward.(At the risk of sounding like TOM4CWB)It hopefully will be in place to offset the removal of our Canadian STE.!

[melvill]

Okay, I'll bite. What's "Canadian STE"?

[wmoebis]

I don't think it is so much of a clearing house we need as a revamp of The Canadian Grain Act to include licensing and bonding of all buyers not just dealers and elevators.
But what is more we need CGC that will monator and inforce it's own mandatory policies. Something with real power.
Glad to see someone else has been after the CGC to do something.

[cropduster]

LEE,Canada`s State trading agency??????(Hint:it starts with a C ).Wmoebis,you sound like such a GOOD Canadian,"Let`s just legislate those suckers into doing things right!!"A clearing house(my idea of it) would have both sides putting up some sort of non-performance bond to generate trust in the other party to complete the deal correctly.NO contract can work unless there is trust!

[Incognito]

state trading enterprise

[wmoebis]

Thanks cropduster makes me proud to be a good CANADIAN.
The legislation is already there it just needs updated to cover the modern times where we are selling more into domestic markets and to non traditional markets. These laws were written a long time ago and times change they could have never forseen corp. livestock and hog barns back when our forefathers wrote these.
The second part of my statement was maybe the most important the poeple that are running our gov,t agencies aren't monatoring them and don't seem to be operating under their mandate. They seem more interested in the grain companies than the producer. Although it is our money who writes them a cheque.

[TOM4CWB]

wmoebis;

I agree we must allow an opportunity for security on sales to these entities.

As we work through bringing all special crops dealers/buyers into compliance with the Canada Grain Act, an opportunity should be created for domestic buyers of our grain to source reasonable security insurance for what is owed to grain farmers.

This however, will be only achieved if the grain buyer we choose, itself, will offer the coverage, and this coverage will come at a cost.

You mentioned a broker.

A broker many times will give a much higher level of comfort that we will be paid when dealing with domestic grain buyers.

This is part of the service being offered, an extra level of scrutiny, close involvement in the industry day in and day out... an ear to the ground that you or I do not have.

This service & information is not free.

I expect to pay a fair price for it.

That was five cents per bushel in our transactions in the past year.

Money well spent in my estimation!

WHO did our work for us?

Market Masters Ltd.
800-440-8390
www.grainwatchdog.com

2005 is all about selecting partners and joint venturers who will give my business good information, help make me more efficient, that allow my family business to prosper.

We have SO much information available now, we Must choose the right partner to boil it down, and make it relevant to our specific business!

In selling my grain, key is the marketer, their integrity, will they be honest, will they operate within Common Law Standards, and am I willing to fulfill my obligations as well.

Simply will we both covenant the Negative Golden Rule, which states:

Do not do unto others as you would not have others do unto you;


I choose not infringe upon the Rights, Freedoms or Property of the purchaser of my grain, and
I will Keep all contracts willingly, knowingly and intentionally.

I expect this same standard from my Marketer, in it’s treatment of my business and my family!

Hope this Helps!

[wmoebis]

I agree however there is no avenue in place for protection on either side in case of misfortune or miss representation. I would be interested in knowing how you would be protected if your marketing agent was to fall victim to circumstances beyond their control and was forced into recievership. I noted that they are not licensed or bonded by the CGC so what other avenues are there that I am not aware of?
I did my homework and was assured by no less than 3 top management employees that I would be paid in specified time but other creditors had other ideas. I did put trust in this company. I am a wheat producer and this is the very first time I have sold outside the CWB and not very good results. I am not blaming anyone but the system.

[wd9]

Get as much money up front before the grain is delivered. You don't have to sit back and be the 'victim' in a contract. Get it written in the contract, yes, you can change the contract. If the buyer will not forward you the money, you are dreaming if you think they will forward it after you deliver the grain.

Use a lawyer in trust to hold the funds until the terms of the contract are settled - even pay the fees of the lawyer as a good bargaining tool to get the contract signed or as cheap insurance for yourself. There are many ways to protect yourself if you stop thinking like a 'farmer' and more like a 'manager'.

[hgb]

TOM4CWB- All your getting getting for your 5 cents a bushel is a broker putting a seller and buyer together(which is an important connection) But as with any broker where end user pays for the delivered product, the producer can loose his product.
A couple of years ago I sold several thousand bushels of bly through the broker you mentioned in your post, things unfolded this way:
1- sent the barley out in 3-4 day period
2- received cheque for bly 10 days after delivery
3- deposited cheque,sent broker 5 cents/bushel commision.
4- a few days later I find out bly cheque was NSF
5- notified broker to let them deal with purchaser and was told all would be made right within the week.
6- Nothing was happening, fast enough for me, so I started contacting purchaser to put some heat on him and told broker what I was doing hoping pushing the issue from two parties would speed things up.
7- Got several BS stories from purchaser I investigated some of his stories by contacting his bank etc. and calling his bluff. (I think it became easier to pay me than try to think of more stories to tell)
I still do some business with this broker as they have better prices available at times. The producer stands alone when it comes to getting paid unless ones dealing with a licenced and bonded company. I have found UFA grain marketing to have competative feed grain prices and prompt payment. (licensed and bonded too)