Cranston grain, Trevor Schulz, screws farmers

[directagsales.co]

We also provide payment security to
insure Ag sales. Identical to the Mpower
same backers etc. and likely the same as
MM will be providing.

Here the link for more info.

http://directag.ca/riskmanagement.htm

[wd9]

How do i know direct ag isn't on its last
legs and isn't gonna pay me?

[TOM4CWB]

F.Y.I.
http://www.directagsales.com/management/payment-
security.htm

"The Direct-Ag Payment Security Program is designed
to replace these programs, and directly cover you
against the risk of non-payment by your customers!
But, there must be a catch, you say. No, not this time!

The program is national program, sponsored by
government and industry.
*The cost of the program is significantly less than 1%
of insured sales, and the cost of coverage in the United
States and Canada is no more than ½ of 1 per cent
(and can be less!).
*The DAPSP is underwritten by Atradius Credit
Insurance, NV and Export Development Canada, two
leading public and private credit insurers with offices
around the world.
*The program indemnifies a loss at 90% - you lose
$100, a claim pays you $90!
*Substantially reduces the risk of loss to farmers.
Eliminates costly credit checks and time in managing
credit risk.
*The program approves your customers, but if we are
wrong, we write a cheque!
*Creates a pool of qualified buyers you can sell to with
confidence.
*Sell now and get paid in January for tax purposes –
and do so knowing you will get paid!
*You only pay for the coverage you use – no more, no
less.
*Simple, inexpensive and efficient – just what you
want!
*Banks can take the insurance certificate as security,
and many will lend up to 90% of the value of the
insurance.
*Banks write down to $0 the value of any commodity
you own once it moves out of this country (they have
difficulty collecting out side Canada). However if there
is insurance the security value is 90%"

Cheers!

[directagsales.co]

wd9 - We don't actually buy any grain
just provide you access to the insurance
and or currency hedging services.

[westsider]

WD9- i like where your head is at, glad you brought it up. i did not want to be the first. these guys can disappear like anybody. Trust me!
Unless they are sitting on the driveway when you get there with a certified check you are not gaining anything.

and anyone that sets up or operates like FNA needs to be looked at with a magnifying glass.

i know as a farmer we carry enough risk without having to worry about getting paid. its nice to have a couple feedlots out my back door that i can deliver to and get paid that day. But, i sure hope the CGC comes up with something soon like talked about above. I heard not till Aug 1st though

[hobbyfrmr]

Gents,
PHONE THEM,.

I know its a busy time of year for grain farmers,
but... we spend more time ****ing around typing
in our fears and apprehensions than it would take
to make the call and get the real facts.

Well, just in case you may be very busy, not
terribly concerned about a thrice of tens of
thousands of dollars please kindly ignore the last
three days worth of FREE advice .

" it's like 10,000 spoons when all you need is a
knife..." - Alanis Morrisette"

I really cannot contribute any more. It is what it is.
Figure it out, or don't. Take it or leave it.
I do appreciate the thread, but I'm exhausted.

[TOM4CWB]

Hobby,

Thanks for adding good perspective on risk
management.

In 2008 there was huge payouts by EDC especially in
the pulse markets. 90 percent coverage got most of
the trade through that reck... I was ecstatic that there
were few problems from that reck. Next time may not
be as kind to us... and a 90 percent backstop on large
volumes gives relative freedom to clean and fill rail
cars; and to make some risk premium for the extra
work.

It is great to employ local people and have
competition... we are all better for good options these
opportunities provide.

[wd9]

I'm just inquiring hobby. Asking.
Researching. Taking nothing for granted.
Getting off my lazy ass

Thanks direct Ag.

[Mike2001]

Being in the industry for 14 years I will say that doing credit checks on buyers is absolutely useless.

I will back this statement up by using Newco grain as an example. He was short to the market over 60,000 MT of feed barley at values that were between $40 and $60/MT offside. If you were to run a credit check on Newco in June he would have passed no problem as he was current on recievables and paying people on time. By july 15th he was toast.

If you lost money or were not paid by Mitchell Grain, Newco or Cranston grain and you went through a broker.....you should be holding your broker accountable. I know Agfinity out of Edmonton is run by Ex-Mitchell Grain employees and i also happen to know they had a bunch of farmers they traded to Cranston grain. NOT good due diligence on thier part. They are in it for the quick buck.

There are more and more "basement" brokers showing up all the time, know who your dealing with, ask who the buyer is. You have every right to know where your grain is going. Go with a trusted name, someone who has been around and who will back you if something goes sideways.

[haveapulse]

As a proponent of risk insurance for a couple of decades some of us are just hoping that this is the last of this type of story to be told. All ag commodities should qualify for risk insurance for obvious reasons. Then if you chose not to take insurance, it is your problem, you protect yourself or not. The current system should have changed decades ago. This change, is long overdue.

[poorboy]

The farmers that fail to deliver should also pay up.
They signed a contract and it doesn't matter if
they hailed out, drought, fire, snowed under, etc.,
they have a contract and should be penalized.

Amazing how many less than respectable
neighbors we have when money is involved.

Dont sign a contract if you are afraid of penalty.

[wd9]

And they brag about it at the coffee shop too.

[Agfinity]

What Mike2001 says is true.

Agfinity spawned from the death of a major, clumsy disaster. While Mitchell Grain, Newco and Cranston all faced different struggles in remaining profitable, one similarity was that they traded to the beat of the drum set by their most trusted brokers. When I started selling seed for Mitchell Grain in 2008, they and Newco were among Ag-Value’s top 3 customers. How did two of their top customers get driven into such humiliating financial ruin?

There are several reasons why these grain resellers are going out of business in rapid succession; one of them being that many of these companies have become reliant on trusted brokers to put on their sales. Using sales brokers to seize big opportunities and put on large, back-bending positions in markets that can rally against them in a heartbeat.

Now, I’m not saying Neil Slingerland of Newco, Gord Mitchell of Mitchell Grain, and Trevor Shultz of Cranston Grain aren't to be held responsible for bad trading and bad business decisions, but I do think it’s important to share that a large part of their financial ruin stemmed from trusting too much. It’s a shame that the best way to mitigate risk in the open market, is to mitigate trust. Agfinity is at fault for trusting a preferred buyer of ours more than we should have. Mike2001 is 100% correct when he says credit checks are useless. Without insurance, you would basically need to know your buyer’s sales position to know if they had an offside position in the market. We didn't know thatNewco was 60,000 MT offside. We weren't the sales brokers who helped trade them into that circumstance. Brokers that are aware of the sales that they've put on for a reseller, like Cranston, know when all hope is lost. That’s when it’s time to gut them and leave them to die, all while they get their customers out of harm’s way, ensuring other producers, brokers and truckers take the fall in their place. After all, a trusted broker can only remain trusted if they protect their own interests.

The industry is being forced to change. It’squite unfortunate that so many need to lose before these changes come to fruition. We need to do better for one another. If a company is facing hard times, we need to be sounding the alarm sooner. Agfinity failed to discover in time that Cranston had developed an off-side sales position. Only a trusted sales broker could have made that assumption. We discovered that things were suddenly not looking good for Cranston on December 11th. We immediately informed a few of our producers that we had brokered for, prior to October 30th, 2012. No losses are acceptable. Not even one load. We understand that. Though we have been continually striving to mitigate risk, it is not possible to eliminate it entirely without insurance. We, like Market Master, have our best interest in hand for the producer. We disclose all known attributes of our buyers before any deals are put in place. Is any one person to blame in the game of getting the best price for the producer? We for one admit that we are responsible, that we share in the blame. There is too much on the line to simply let price outweigh security. If producers choose to turn their backs on brokers, they have their right to do so. But our goal is to partner with you. We want you to succeed, to make as much money as you can in this business. Our goal isn't to make big margins or a “quick buck” off of you. We want the best deal for you, every time.


Though there remain a lot of reputable buyers in this market place, most aren't licensed and bonded anymore. Like the insurance programs Tom4CWB talked about, we too are looking to offer this insurance to our customers. Agfinity is in this business for the long-haul. In tough times, changes are made, and we’re dedicated to fighting for these changes with you.

If you have any ideas (in addition to the insurance) that can help protect farmers and creditors, we’d invite you to share them with us, by emailing info@agfinity.com,
calling us at 1-888-969-5552, or stopping by our office just west of
Edmonton at 15B Alberta Ave, #D, Spruce Grove, AB.Right across from the
Fountain Tire, and near the UFA.

If you’d rather market your grain through an indestructible power house, that will let their feedlots and grain companies bleed-out, but protect you and their interests at the loss of uninformed truckers, brokers and producers, we’d invite you to email Mike, at mstapleton@agvalue.com. He’s been in this industry for 14 years. He’s trusted by many and will get you top dollar.

[AgValueGroup]

We were alerted to this thread and after reading through believe there are some good constructive comments. We take exception to the above post however so we will try and clarify.

"Mitchell Grain in 2008 and Newco were among Ag-Value’s top 3 customers." - FALSE

" companies have become reliant on trusted brokers to put on their sales."- FALSE

"Agfinity is at fault for trusting a preferred buyer of ours more than we should have`- TRUE

`Agfinity failed to discover in time that Cranston had developed an off-side sales position`- TRUE

` Without insurance, you would basically need to know your buyer’s sales position to know if they had an offside position in the market.`- TRUE

``If you’d rather market your grain through an indestructible power house, that will let their feedlots and grain companies bleed-out, but protect you and their interests at the loss of uninformed truckers, brokers and producers, we’d invite you to email Mike, at mstapleton@agvalue.com. He’s been in this industry for 14 years. He’s trusted by many and will get you top dollar. - If you are not informed but selling grain for a producer then shame on you!

AgValue Group 2001 Inc. has been in business for 12 years. Through those 12 years we are proud to say we have never had a producer NOT get paid in FULL. We would encourage any producer to ask the same question of their broker. It is through our relationships and daily monitoring of the markets, that we are able to avoid companies defaulting on payments. We do not feel it is our responsibility to manage other brokerage companies positions or risk in the market. There are always red flags before a company goes down...ALWAYS.

For that reason we did not have a single producer load of grain sold to Cranston Grain, Mitchell Grain or Newco Grain, nor did we have any truckers owed money when they went broke. This is called good management. Producers trust us to put them together with reputable buyers.

We are Cash Grain Brokers, as a broker we Trade from a seller to a buyer. The term SALES Broker does not even make sense.

Markets in the past 2 years are hyper-volatile and a buyer who was great to deal with 6 months earlier may not be stable now. Information like cattle on feed numbers, diversification, own the cattle or custom feeding, payment terms, outstanding payments, depth of position..... these are all ways a Broker can mitigate the risk for their clients. But you need to have the relationship in order to find out a good deal of this information. We are fortunate to have these relationships and they don`t come from ``letting them bleed-out``.

Ask your Broker these questions before signing, know where your grain is going.

We have no issue with our name being brought up in this discussion. We have done a better job than most at mitigating risk to our producer clients.

There are other Grain Brokers who had producers not get paid from Micthell Grain and from Cranston Grain, who took their responsibility very seriously. They actually paid the farmers themselves in order to preserve their reputation and relationships.

We would hope that any grain brokered to Cranston Grain will be treated in the same manner. The brokers who put the farmer in harms way should shoulder the responsibility and pay the producer what he was promised. If they do not, then what good is price discovery.

We will not be posting again but felt it necessary to clarify a fairly slanderous post from Agfinity.


Michael Stapleton
AgValue Group 2001 Inc.

[grainboy]

So if I have this right your tell me there was
brokers who paid a farmer when newco/Mitchell
went broke?

Who?