Canola Markets

[farmaholic]

There is a Processor near me that is notorious for paying late. If I remember correctly, their contracts state 30 days. They've always paid but it is maddening to have to wait. The longer it takes the more doubtful one becomes. I've seen contracts that say "10 business days" which tranlates into 14 days...

My theory is, we're not your banker, have in place sufficient credit with a line of credit or operating loan, we have to.....

[farmaholic]

What penalty should be applied for late acceptance of contracted product?

What compensation should be paid for late payment? Whether product was delivered/recieved on time or later than contracted terms?

It is a bit of a game of give and take. Remember, how would you like to be treated if for some reason you couldn't live up to the terms of the contract?

Obviously there are no exceptions to payment default.

[Goodtime]

I am usually pretty cautious when contracting and haven't ran into an issue with not fulfilling a contract obligation (knock on wood). If they are going to pay in 30 days they should put it in the contract so a guy can be prepared for it. At least it would keep a person from doubting them and it would lower the stress level.

[farmaholic]

Agreed. Yes you're right.

[oneoff]

When you lose sight of the tail lights of the truck hauling your grain....your grain is gone.

With no down payment and only a piece of paper that says 15 or 30 working days to payment (and worst case no viable insurance of any kind)....you are 100% on the hook for the possibility of never seeing a red cent.

And that has happenened in the past...to super smart marketers as well as trusting souls.


It will happen just as infrequently in the future....we can count on it.

In fact when the econony takes a 1929 type stumble again....no one will have 15 or 30 days; to get out without a blood bath.


The grain marketing system remains potentially fatally flawed; and no buyer (with speculative tendencies (or not)); or especially sellers remains immune.

[oneoff]

30 days can simply be interpreted that there's no money in the account at the present time to make payment

Or that as long as you will be their banker.....why would anyone risk their own money when the seller tolerates the arbitrary period until hopefully receivables show up.

Its all about when buyers recive goods; they part with their money or have firm arrangements in place to absolutely make payment in a timely manner

[bucket]

Good points.

Here is the most interesting. If you sell your grain to an elevator the freight is prepaid.

How is it that the railways managed to get prepaid for work they haven't done yet and farmers are left waiting when theirs is?

[Goodtime]

I agree with you Oneoff, it is also a joke when these outfits proclaim they are bonded...like that is going to help.

[sumdumguy]

most non-payment issues that we experienced:
1. Young marketer in Winnipeg. He was a casualty of the f/x market when CDN dollar crashed. Despite court case, he left about 15 of us hanging.
2. Some foreign type in Calgary, Rayally screwed there. He left the country.
3. Feedmills in Southern AB. They just emptied the bank accounts, declared bankruptcy, changed their name, carried right on. Never saw a cent there.
4. Then the Mexican train robbery where an entire railcar of bagged Canaryseed disappeared at Laredo. Someone in the freight forward office manufactured false release documents and when the load entered Mexico, adios.
Mexico, India, Turkey, Middle East in our experience. Theft is a way a life as we witnessed while a broker we were with in Mexico stolen a container of cinnamon from an East Indian exporter and laughed to us that the cinnamon was going to finance their summer in Spain. That's when we said see you later.

[sumdumguy]

After I posted, I realized that I forgot to state that our experiences were not deals through Johnston's. Just wanted to share some of our experiences in marketing.

[Kodiak]

I've done a lot of selling to smaller companies and buyers. Only once, a number of years ago, did I get screwed over. A southern Alberta Feed Mill. Owned at the time by a couple of brothers - Dutch or Belgian immigrants if I remember correctly. I talked to them at the time, and they admitted they could pay. But they allowed (or more correctly, orchestrated) their feed business to be bled by other companies they controlled. Feed Mill declared bankruptcy. They never did pay. Total scum bags. They should have been jailed.

[Kodiak]

And same thing....the deal was not brokered by Johnsons.