Defaulted Malt Barley Contracts

[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

[stubblejumper]

will the farmers go back to the same malt companies or blame the CWB?

[norton17]

This farmer will be going with a different malster next year

[Burbert]

SOOO Contracts aren't worth the paper that they are written on! Has anybody tried suing the malties , that aren't holding up their end of the agreement. Just like insurance, it appears that the malties, are scum and you'll have to sue to get your cash. How could this industry operate in future, if only the farmer has to live up to the contract? Doesn't surprise me, to say the least. After all we's Canadian farmers are such nice people and most of the times won't say or do s--t at the best of times. Truly a win/win for malties and grain companies, railrods and fert company types....... Hardball, hardball, thats the game wes got to play in future methinks....

[Hopperbin]

Charlie is it true that if the Maltster had a fixed or cash plus contract to buy malt at 6.5, then he would still have to buy it from the CWB at that price, in other words the CWB still guaranteed the supply. So if that is the case then there is no reason to get out of the farmers contract unless he has poor quality malt.

[Fransisco]

Stubble said, "How can the farmers for just me blame..."

Spoken like a true welfare case.

[Hopperbin]

I know there are a lot of us farmers here that can brag up an 85% acceptance on malt. But getting high acceptance to a Canadian Malt Company is a totally different thing. These contracts were high risk from the start.

[charliep]

Hopperbin

The process on cashplus is the CWB and the maltster agree to a price (I
assume there is a firm contract signed but not 100 % sure on terms). The
CWB then determines what cashplus payment the maltster can offer their
farmer clients. The maltster then offers this contract payment to farmers to
get signup. When signup occurs, there is a 3 way deal with the CWB, the
maltster and the farmer.

From the contract, any grade disputes are between the farmer and the
maltster - as in all cases, the CWB does not have a role in grading or malt
barley contract enforcement. I will have to check to see if the original
contract between the CWB and the maltster is still valid.

Will note the cashplus does have effectively an act of god clause for pre
harvest contracts. A source of controversy for grain companies/exporters
but something the maltsters have been more willing to live with.

If a minimum price production contract, none of the above applies - terms
will be different for each company.

My understanding by the way. What have others been told.

[stubblejumper]

Fransisco Just because I do not agree with the small percent of Farmers For Just Me does not make me a communist. I am one of the majority of western producers who feel the CWB is making me money without stabbing my neighbours in the back.

[charliep]

Curious how all topics generally get to the politics of the CWB and
away from concerns about how the CWB operates/suggestions for
improvements.

To both the combatants here, do you support the cash plus
contract concept for malt barley? Could the same approach be
used for other crops - say durum? The reason I ask is the durum
market has many of the same issues as malt - the main one being
no effective risk management mechanism outside matching cash
sales against farmer contracts.

[charliep]

stubblejumper

If the majority of farmers indicate they would prefer an open or
dual market for barley in the 2009 CWB producer survey, should
the CWB board of directors allow make this happen? They have
indicated this wish in the past.

http://www.cwb.ca/public/en/farmers/surveys/producer/pdf/s
urvey_full_060608.pdf