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Frequent Contributor

Re: Buyer policy

Wonder if this year will change the way folk think about marketing next year?

Tom S. in Tn.

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Senior Advisor

Re: Buyer policy

How do the grain farmers walk away from the contract?  Take them to court.  Was it not in writing?

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Advisor

Re: Buyer policy

Maybe that will happen. However if they do not allow rolling forward like they did last year, they have lost a customer and their credability is done.
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Senior Advisor

Re: Buyer policy

Is rolling in the contract, a special deal for friends, a good customer act, or what?  What I'm getting at is, is the roll-over something the farmer has a RIGHT to expect or is this something the farmer HOPES will happen?   Is this a situation where we are willing to abide by an agreement when it is in our favor but expect someone to let us out when it isn't?

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Advisor

Re: Buyer policy

Everybody talks about the ability to roll contracts forward but that is not a given. If your commodity buyer allows it, with a fee, great. But not every buyer will permit it. Having said that, I remember in 2007 and 08 where they demanded delivery. On the flup side, how many times did farmers lose out when ethanol plants reneged back then and bankruptcy courts forced delivery at lower prices?
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Advisor

Re: Buyer policy

MY point is the laws should be consistant and equitable both ways.
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Senior Advisor

Re: Buyer policy

I tink farmers sign a lot of contracts they don't read and if they did they wouldn't understand them - or want to understand them.  

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Advisor

Re: Buyer policy

Perhaps so. It still begs the question of equity and fairness. Bankruptcy should not make it easy to escape from honoring purchase obligations.
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Veteran Advisor

Re: Buyer policy

Jim I believe a grain buyer can let the farmer roll over the contract into the following year but it comes with a penalty. I really don't know how it all works since I have never come up short. What I do know is some places have been blessed with decent rainfall this year and we are far from those areas so finding grain to meet a contract might mean a farmer from Indiana has to pay trucking on $8 corn from Iowa  to deliver his $5 contract..... Its just a bad all around scenario. The elevators who are a little more forgiving in a year of hardship and let guys at least have the option of a buyout may find more business the next year. We all know what we signed and some will take the hard road and find the grain just to keep his name good.

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Veteran Advisor

Re: Buyer policy

JIm I think you were talking to me. In the instance of my two friends it is like this............

 

1 farmer is taking the guy to court he doesn't even have a court date yet! Lets say he gets one set in the next two weeks. I'll bet it is 18 months till the hearing. Most likely one of them will not be in business by then so does it really matter?

 

2nd farmer doesn't have the money to hire a lawyer. SO he just called me to tell me he was reamed again. Almost started crying. To be honest he may not be here by Christmas.

 

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