"Contract squeeze worries farmers " is the WP headline

[the big wheel]

You’re talking about staying within the current parameters of
The system we have.
It really doesn’t sound too good when the grain co is stuck with
9 buck loss does it? So why is it acceptable for the farmer to
Bare that risk? We’re richer or what? One of the problems
Is this fake pricing in the fall. Never more evident than
Last year prices were based on a fake production number
That who was promoting? Grain companies were. I’d like to see rhe
Books on who bought what at 11 bucks and got sold at 20?

[farmboy44]

Ok, so I’m not totally misunderstanding it’s just not clear as glass in my mind and I don’t speak the lingo.

But shouldn’t the buyers be on the hook for the $9, they’re the ones that sold the futures. The farmer sold for $11, the GrainsCo decided to sell on the futures and that’s screwing them now.

Do they HAVE to sell on the futures or they choose to because that’s how they can make like bandits a lot for the time?

Goes back to farmers footing all the risk, doesn’t it.

They don’t have to hedge the futures.. several commodities (durum, flax, peas, lentils) have no futures component.

However the farmer didnt deliver the grain, therefore they are in breach of the contract. Companies also make sales based on the cost basis of their ownership. Do they get to just tell their buyer next year?

Do you really think you should be allowed to just contract at 11, not deliver, and sell it across the street for 20 bucks?

[Blaithin]

They don’t have to hedge the futures.. several commodities (durum, flax, peas, lentils) have no futures component.

However the farmer didnt deliver the grain, therefore they are in breach of the contract. Companies also make sales based on the cost basis of their ownership. Do they get to just tell their buyer next year?

Do you really think you should be allowed to just contract at 11, not deliver, and sell it across the street for 20 bucks?

No, be on the hook for $11, buy out the $11 if you don’t deliver. Why do you have to buy out for the company too? It’s a risk for the farmer to forward sell which means it’s a risk for the company to forward sell. Why don’t they foot that risk like the farmer does?

[farmboy44]

You’re talking about staying within the current parameters of
The system we have.
It really doesn’t sound too good when the grain co is stuck with
9 buck loss does it? So why is it acceptable for the farmer to
Bare that risk? We’re richer or what? One of the problems
Is this fake pricing in the fall. Never more evident than
Last year prices were based on a fake production number
That who was promoting? Grain companies were. I’d like to see rhe
Books on who bought what at 11 bucks and got sold at 20?

Which party is nullifying the contract? If you cancel your mortgage does the bank pay you a penalty? If the land market crashes should the bank reimburse you for lost unrealized gains?


And we wonder why city folk perceive us as complainers

[farmboy44]

No, be on the hook for $11, buy out the $11 if you don’t deliver. Why do you have to buy out for the company too? It’s a risk for the farmer to forward sell which means it’s a risk for the company to forward sell. Why don’t they foot that risk like the farmer does?

Because since you breached your contract the company now has to pay 20 dollars to replace the tonnes they bought from you at 11

[Blaithin]

Because since you breached your contract the company now has to pay 20 dollars to replace the tonnes they bought from you at 11

Is it in the contract that you have to buy back what they sell if you breach?

[farmboy44]

Is it in the contract that you have to buy back what they sell if you breach?

It would absolutely be In the terms.

I’m not trying to be rude I’ve appreciated your contributions here for years - but is it really that hard to comprehend?

I agree to buy a new truck for 50000. We sign a contract to that effect. It’ll be delivered in a month. A month comes by and guess what, there is a sale in at the dealership and now the truck is worth 45000. Should the dealer owe me 5k? Is he the bad guy for saying a deal is a deal? Should I be like others on here and say I’m never doing business with them again if they don’t give me a better deal than the one we both agreed to?

[the big wheel]

Which party is nullifying the contract? If you cancel your mortgage does the bank pay you a penalty? If the land market crashes should the bank reimburse you for lost unrealized gains?


And we wonder why city folk perceive us as complainers

Which grain company you work for?

It all comes down to being rigged so the risk is always ours.
And that has become acceptable. If city folk actually were told and
And understood how we are footing the risk bill
While everyone in between bares none they wouldn’t
Be perceiving us as complainers they’d want some
Hides taken off the manipulators at the top.

[blackpowder]

Actually, it took me 3 different teachers before I was able to grasp the concept of selling paper without owning the item.
Commodities, stocks, options whatever.
Could you run the books for a multinational? Then why are you farming?
Every generation has learning opportunities.
The books may not necessarily be bushel for bushel 0 $ difference at the close of every day, but you can bet they don't speculate much if at all.
Wheat, corn, beans much easier sourced than Copper, coffee or OJ.
I don't understand it all.
Apparently we could all it understand better.

[Blaithin]

It would absolutely be In the terms.

I’m not trying to be rude I’ve appreciated your contributions here for years - but is it really that hard to comprehend?

I agree to buy a new truck for 50000. We sign a contract to that effect. It’ll be delivered in a month. A month comes by and guess what, there is a sale in at the dealership and now the truck is worth 45000. Should the dealer owe me 5k? Is he the bad guy for saying a deal is a deal? Should I be like others on here and say I’m never doing business with them again if they don’t give me a better deal than the one we both agreed to?

Maybe I’m just not being clear about what part is hanging me up.

When they contract grain, it’s on their books. They are under no obligation to contract their books out as sales, correct? Just like farmers they browse the field and find a buyer and sign a contract for a price.

Just like farmers running the risk their production will fall through, companies would have that same risk. It could fall through. They probably have a large amount of insurance for such a scenario as then they’d be in breach of their contract.

So why do farmers have to pay for the companies breach as well as their own?

In no way am I saying farmers shouldn’t have to pay if they forward sold. But if companies also forward sold at a higher price, why do farmers pay for that. That is not their contract.

In your dealership scenario, if something happened in that month where the dealer had to spend another 10K on the truck, you would not expect to have to pay an additional 10K on top of the 50, would you? Not if your contract was for 50. That’s something the dealer has to eat.

IF it’s in grain contracts that farmers are also on the hook if their breach causes the company to breach then yeah, they’re paying the extra. I don’t know what’s in a grain contract.

Probably the most times I’ve typed out breach, ever.

[farmboy44]

Which grain company you work for?

It all comes down to being rigged so the risk is always ours.
And that has become acceptable. If city folk actually were told and
And understood how we are footing the risk bill
While everyone in between bares none they wouldn’t
Be perceiving us as complainers they’d want some
Hides taken off the manipulators at the top.

Lol yep. Come on a marketing forum and actually try to educate some people on how marketing works and I must work for a grain company.

I just can’t stand guys not being accountable for the decisions they made. Same as if you locked in fert for spring and the price goes up after, do you share the risk on that? Pay a little more come seeding despite the contract?

Give me a break. If you actually took some time you’d realize you actually have the opportunity to learn here but instead you just complain

[jazz]

I think any farmers who are out on a contract will find an easier time negotiating with their lender for a principal skip to throw at buyouts than getting a fair shake from our grain companies.

These guys probably know there is a govt top up to one of the programs that will go right into their coffers as well.