Defaulted Malt Barley Contracts

[bgmb]

Another thought along these lines...

even though it will never happen it would be nice if all farmers stopped forward contracting. I know it lowers our price risk a bit but I think it lowers risk more for buyers and end users. They are the ones who benefit most from forward contracts not farmers.

This malt thing last year is a classic example, put out a big price to get farmers to seed acres then there is lots around and they don't have to buy the high priced contracted stuff. Make an excuse not to take it and buy the cheap stuff.

They didn't want another 2007 where they took barley that looked like rat shit.

[charliep]

Just curious as to how not contracting will help. The fact is that 4 mln tonnes out of the 11.8
mln tonnes of production (11 if you count w. canada) was selectable. I suspect what is
needed is better contracts, mechanisms for ensuring performance on execution and farmers
willing to stand up for rights by not growing the crop without reasonable guarantees around
acceptance/profit. Listened to a maltster from the UK at WBGA annual meeting in 2008 and
they have had to contract to guarantee supplies.

I did look at the video and was just commenting on what I heard at the CWB district meeting.
Even to bgmb and others - have companies waffled on cash plus or simply their production
contracts with guaranteed minimum prices? What does the contract say?

[bgmb]

I'm done talking about this, its time to move on....

Bottom line is allot of guys got screwed out of allot of money by maltsters this year.

Until we see some real contracts with discounts for specs.(like in the US) rather than arbitrary numbers any contract by a maltster won't be worth the paper its written on.

[bgmb]

Bgmb

Why would the malsters honor these contracts, when down the road they can buy the same barley from our good old CWB for 1.10/bus less.

If the losers in Winnipeg would've kept a $6.50 PRO all Malt contracts would've been honored.

They should've kept the $6.50 PRO, and made a $3.50 cash plus problem solved.

I know a bunch of guys in the Cash Plus are flaming mad I said this, but this would've saved all these malt contracts being broke.

They dictate the price.

[mcfarms]

Biggest issue with this ongoing problem and it's been happing for years is the inability of producers to have an independant 3rd party decide quality issues as the final arbiter of malt quality or specs under the current system is the Maltster.( Anyone know the testing protocol for chitting? Answer there is none) I would advise looking at the system and asking some hard questions on standards and testing protocol try starting here.


http://www.grainscanada.gc.ca/gscommittee-comiteng/bsc-sco-eng.htmls.

[charliep]

Not trying to push too far but is important whether a cash plus or
a minimum price production contract.

The terms of the contract are all outlined on the CWB website.

http://www.cwb.ca/public/en/forms/farmers/#forms-2009cp

Terms around quality.
QUALITY
The Producer agrees that the Net Tonnes to which this Contract
refers, shall meet the Minimum Quality Specifications as
outlined on the Contract Form, or such other quality
specifications as is acceptable to the Selecting Party at the time of
delivery and the Net Tonnes shall be in all respects suitable for
malting and meet all other Minimum Quality Specifications
outlined by the Selecting Party and all specifications outlined by
the Canadian Grain Commission for Select CW Two-row
or Select CW Six-row, unless otherwise agreed to by the Selecting
Party and the Producer.

Minimum Quality Specifications Quality

Maximum moisture content - 13.5
Minimum Plump - 85 %
Maximum Protein - 12.5 %
Minimum Germination (based on a
three-day, 4ml water-based test
usng the Germinatie Energy method) - 95%
Minimum Varietal Purity - 95 %

Would read the whole contract - particularly producer and
selector obligations (paragraphs 7 and 8).

[charliep]

I will just toss the dispute resolution clause in the cashplus on
the thread.
DISPUTE RESOLUTION
If the Selecting Party rejects the Net Tonnes on account of the
grain not meeting the Minimum Quality Specifications or
such other quality specifications as are acceptable to the
Selecting Party, the Producer shall have the right to engage an
independent third party, as agreed to between the Producer and
the Selecting Party, to take a representative sample and
test the grain against the Minimum Quality Specifications or
such other quality specifications as are acceptable to the
Selecting Party . If the third party determines that the grain
meets the Minimum Quality Specifications or such other quality
specifications as are acceptable to the Selecting Party, the
Selecting Party shall accept the Net Tonnes or shall be in
default pursuant to Section 8 above. The Producer shall pay for
the costs associated with the third party testing but shall be
reimbursed by the Selecting Party should the third party
determine that the grain tested meets or exceeds the Minimum
Quality Specifications.

[jensend]

so the selecting party is holding all the cards because they set the standards and can change them. the contract is a joke because it of no value unless it can be enforced.

[stubblejumper]

The same thing happened with lentil contracts last fall. When some producers tried to deliver they were told their product did not meet specs but would be purchased as a lower grade and a lower price. How can the farmers for just me blame this on the CWB?

[parsley]

1.Will the farmer go back to the same lentil buyer in 09? Or send a by taking his business elsewhere, thereby disciplining him?

It's called CHOICE! Stub, even you show be able to play this message on your single track. Par