Marketing advisors

[heidi.dutton@me.com]

Advice from the other side: As a processor and market participant, I still use Larry as a marketing advisor.

[furrowtickler]

Absolutely one of the best

AOG on all contracts and I would market a lot more ahead of time .
writing cheques to grain companies when the grain is not there due to Mother Nature is crippling to farms .

[AlbertaFarmer5]

Absolutely one of the best

AOG on all contracts and I would market a lot more ahead of time .

Can anyone explain to me how an originator can offer an AOG?

Either they have already presold the product at the same time as the farmer presells the grain to them, and they will then be on the hook to supply said product when the farmer can't due to an act of god.

Or else they are speculating and have not presold the end product while simultaneously guaranteeing the farmer a certain price far into the future. Which seems to be even more risky in a low margin industry.

Or is there insurance that the purchaser/processor can buy to cover this?

Or is the AOG written into the contracts all the way up the food chain if triggered at the farmer level?

[LEP]

Can anyone explain to me how an originator can offer an AOG?

Either they have already presold the product at the same time as the farmer presells the grain to them, and they will then be on the hook to supply said product when the farmer can't due to an act of god.

Or else they are speculating and have not presold the end product while simultaneously guaranteeing the farmer a certain price far into the future. Which seems to be even more risky in a low margin industry.

Or is there insurance that the purchaser/processor can buy to cover this?

Or is the AOG written into the contracts all the way up the food chain if triggered at the farmer level?

It's a risk to the processor. Usually, but not always, at a slightly lower price to help offset the risk.

I understand why more companies don't offer it.

However, I don't know why they don't offer it on a hedgable commodity. I realize there would be a cost. But if there were a greater use of options because of uptake, the price on options should be reduced.

[AlbertaFarmer5]

It's a risk to the processor. Usually, but not always, at a slightly lower price to help offset the risk.

Thank you
Nothing is free.

The producer will end up paying the cost one way or the other. If we want someone else to take on the risk.

[heidi.dutton@me.com]

We offer both AOG and DDC contracts for new crops. I cannot speak for other vendors/buyers, but I can say that both risk profiles are managed differently.

[furrowtickler]

We offer both AOG and DDC contracts for new crops. I cannot speak for other vendors/buyers, but I can say that both risk profiles are managed differently.

Great point Heidi, at least you give the growers that option when you can , and it’s appreciated

[AlbertaFarmer5]

What is DDC?

[shtferbrains]

Deferred Delivery Contract?