Reneging on Contracts?

[kato]

Talking to a friend the other day and he said that he knew of some local backgrounders who had contracted yearlings off grass for this fall who have had their contracts backed out of.

Anyone heard of it?

[15444]

I could believe it. Particularly if it was for earlier delivery. Latest prices at Winnipeg are not too fantastic. I usually sell end of August, but I think I will hold out selling my yearlings till end of September. But I am still second-guessing myself.

[kato]

This guy said that he'd been told the holders of the contracts figured they would just pay the $40.00 penalty on the contract, and then buy the cattle for $300 less in the ring.

Wouldn't it be ironic if it turned out that they weren't cheaper in the ring?

[grassfarmer]

If it were typical to have $40 penalties on contracts
wouldn't there be more broken contracts over the
years? I'm sure there are many times that that would
be less than the difference between spot price and
contract price. I just assumed a contract was a
contract end of story.

[kato]

It wasn't in 2003. When you sign a contract with an American it's a contract only as long as they choose.