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Veteran Advisor

I have a question on grain contract payment terms...

What is the range of payment terms out there ?? Especially from the big players...

 

At our corn processing plants, we pay the day after delivery----but have been getting a lot of pushback from the head shed ----in fact, they claim one of the biggies in the eastern cornbelt may only pay 1-2 times per month???

 

We want to stay with our current policy (for several reasons), but need to know what the rest of the industry is doing...

 

TIA

 

Ray J

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22 Replies
Frequent Contributor

Re: I have a question on grain contract payment terms...

If you are having problems sourcing corn now with your present payment policy, how much more of a problem will you have sourcing corn paying only once or twice a month.....?    With many ethanol plants struggling with their operations now with high corn prices and problems sourcing corn, I am wanting my corn check as soon as possible.....!

Senior Contributor

Re: I have a question on grain contract payment terms...

 Here at the local Coop I can get my check before I leave the lot with the truck if I wish. I think they would also be alright if I let them keep the money for awhile, but they won't pay interest anymore so may as well get it right away.  Patrick

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Veteran Advisor

Re: I have a question on grain contract payment terms...

I did not say we were having trouble sourcing corn with our current policy.....and I did not say WE were going to change to payiing 1-2 times per month....the more likely change would be paying 1-2 times per week...IF it happened at all...

 

simply want to know what are the various payment terms out in the world of corn these days....

 

Ray J

 

 

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Frequent Contributor

Re: I have a question on grain contract payment terms...

Didn't mean to infer "you" were having problems sourcing corn....I should have put "ethanol plants" in place of "you"....will try to do a better job of proofreading from now on......!

 

(If "ethanol plants" are having problems sourcing corn now with "their" present payment policy, how much more of a problem will "ethanol plants" have sourcing corn paying only once or twice a month.....?    With many ethanol plants struggling with their operations now with high corn prices and problems sourcing corn, I am wanting my corn check as soon as possible.....!)

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Honored Advisor

Re: I have a question on grain contract payment terms...

Ray,

Our distribution point delivers to a local SW KS alcohol plant, two major cattle feeders and Seaboard in the Okla panhandle.

Alcohol plant pays weekly---- delivery tickets are submitted for payment on friday and checks go out the following week.  It is nearly a two week drag time, but it is actually weekly.  We get a report at the end of the delivery week and check the following week.

 

Amarillo based cattle feeder is twice a month---------- unless requested to be quicker------- they are accomodating.

 

Okla. Panhandle cattle feeder and Seaboard hogs pay weekly ----------- similar to the ethanol plant.

 

 

Come to the great SW Ray   Smiley Happy      

 

Appreciate your posts

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Honored Advisor

Re: I have a question on grain contract payment terms...

If some plants are paying once or twice a month, it just sounds like a "cash flow issue" because money is cheap.  And with computers, even in the heat of battle with trucks lined up a block long at harvest, the gal in the co-op can have a check in your hand before you finish the bank`s complimentary apple. With memories of "Vera Sun", not getting paid timely is kind of a deal breaker.  

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Honored Advisor

Re: I have a question on grain contract payment terms...

I haven't checked Iowa laws to see if there have been changes lately.

 

One used to be able to demand pmt upon completion of the scale ticket here in Iowa.

 

Several enities have gone to next day pmt, not sure if push came to shove that would fly. 

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Frequent Contributor

Re: I have a question on grain contract payment terms...

Ray, the more things change the more they stay the same. Back in the early 90's when I worked for Cargill we went through the same thing. The bottom line in my mind is this .... You have the customers corn and the customers money, and  if you have the ability and choose to wait longer than next day to cut the check; That is wrong imo. You are doing what is the right thing to do by paying next day. Why change that at the detriment of your customers. We also went through the QIP process in the early 90's. Quality is defined as conformance to customers requirements. You are currently meeting that standard as it applies to your customer corn payments. To change would erode that . jmo

Contributor

Re: I have a question on grain contract payment terms...

Adm asks us how we wanted to be paid a few weeks back.  If bringing in loads all week, could they hold till weekend and send one check?  or would we like to be paid every day.  After MFGlobal, i want my money pretty quick.  And that goes for about everything else I'm buying.  

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