Defaulted Malt Barley Contracts

[Fransisco]

I didn't say you were a communist, I said you sound like a welfare case. All welfare cases aren't necessarily communists but I suppose it helps.

You have a problem with farmers who just want to look after their own farms, hence your snide ad hominem remarks about " farmers for just me".
The insinuation from this remark is that they should be farming for someone else. You, perhaps?

[parsley]

I love being a farmer just for me. In fact, I'm trying to perfect it! Once I can get rid of all the grain inspectors and quit paying so much bloody income tax to keep you in subsidies, stubble, I'll be a little closer to haveing something left for me

Nice ring, huh?

Just for me. Hmm.

pars

[parsley]

Poetry for Stubble just from me :


For me, it's my family 'long with me comes first,
Even though you're begging hungry with the barley thirst!

Stop your schemin' and persuadin' that you're needin' half what's mine
If you can't make a livin', you're too weak to breed on,.... fine!

Is that what you call just for me?
LOL, Pars.

[tipsy]

A number of years ago we quit growing malt barley on our farm.There were a number of reasons for this,hard to manage in the fall, seems we were always drying the malt,always got the bottom 2 grades.But,probably the most important our farm carried all the risk while the grain company and cwb carried none.So until we can deal directly, one on one with a malt company we will not be growing any malt.

[broker]

Canada Malt uses third party grading for all of their sampling to avoid any disputes. I deal with them and Anheuser and would take Canada Malt any day over the American maltsters.
My clients had 99% acceptance over the last 5 years through Canada Malt. Yes, there are hiccups, such as the Cash Plus/Guaranteed price situation this year, but guys are still getting better deals this way than through the line companies.

[charliep]

Made the inquiry as to what happens in to a CWB/maltster cash plus contract when a farmer part of the 3 way deal is not able to make quality specifications.

TO HIGHLIGHT, A FARMER NEEDS TO READ ALL MALT BARLEY CONTRACTS (INCLUDING CASH PLUS).

The reason I highlight is that a farmer to know if the original cash plus contract has an act of god or not. If the original contract has an act of god and the farmer can't make specifications, the maltster can go back to the CWB and ask for their cashplus commitments to be reduced by the amount of malt barley the farmer is not able to deliver.

If there is no act of god clause in the contract, then the malster is required to fill the full terms (including volume and price) of the original contract. Obviously the farmer is on the hook for damages if prices have gone up but on the other side of the coin, the maltster is also required to pay the higher price if prices have gone down - either the CWB or another farmer if the maltster can transfer the contract (no compensation the original farmer).

On the original cashplus contract, the maltster can have the CWB put in different quality specifications than the original contract on the CWB website. AGAIN, FARMERS NEED TO READ THEIR CONTRACTS AND BE PREPARED TO LIVE WITH THE TERMS.

[Burbert]

If you have a contract with a maltie and they won't live up to their end of the agreement, all you can do is SUE THEM!!!
Or whine and snivel, and blame the CWB, commie, losers, then walk away and think about next year. What about a class action suit, a bunch of the real big, good farmers should git together and teach the malties a lesson, maybe even name the CWB in the lawsuit, really raise heck. Put Ritz's name in somewhere, that'll git the govnment involved and stevie will run to the rescue. HARDBALL BOYS/GIRLS HARDBALL thats the name of the game, or is it still snivel and whinning that prevails??? Heck put MADOFF's name in, everybody hates him. LOL's

[charliep]

Interestingly enough, know lots of farmers who are professional malt barley growers and have malt barley selected 80 % of the time (4 years out of 5). Some concerns year to year but most have a very good relationship with the malt companies (first name basis selcotors). Put another way, it is about as close to a closed loop value chain as you will see in effectively what is a commodity market. When I look at budgets, malt barley is the top gross margin crop most years - professional growers are paid well for what they do.

Burbert - Do you think the malt barley cashplus is a good program? What role should the CWB have in addressing your concerns about contracts? My thoughts is that all your concerns exist in the current single desk market with the CWB not involved in selection or contract enforcement but maybe I am wrong.

[checking]

Spoken like a true broker, Broker!!! I'm with tipsy - been there, done that. In this situation, there were two more twists. Call for it in road ban. Then reject 10 cars in July on resubmit because someone suddenly found one kernel of ergot in one sample. Skeptic that I am, I think it had more to do with the price drop from $4.00/bushel down to new crop $1.75/bushel.

[Hopperbin]

Broker in a farmer's life time they are never going to get 99 percent acceptance it is impossible. Maybe 100 percent over the 5 years but the days are then numbered from there. Charlie seems to me these fixed and cash plus deals on malt are high risk which is also why the prices were high, and better off to go into the pool, especially when the CWB risk profits all go to the pool to prop it up. Does it go to the pool or the contingency? Charlie I believe every load of malt that leaves the farm should be guaranteed by the CWB or Malt company to make grade. Wouldn't be hard for the trucker to pearl the sample to check the barley. Only takes a minute, Then if then and there it does not make grade then the farmer can pay the trucker for coming out and either rebin it or send it somewhere. If it does not make the grade then it is the farmers fault anyway, we all know what we got. If we don't then don't grow or sell for malt of course there will be some risks.

[charliep]

The cashplus is about as clean as any of the CWB programs and does not involve or utilize the contingency fund in any obvious way (can't say that money isn't moved around but that is the case with all CWB practices). Off topic but will be interesting to see how the CWB handles cashplus in the 2008/09 pooling year annual report - maybe under their accounting for cash sales.

Maltster contract is $X. The farm cash plus payment is $Y. The difference is $Z, some of which is held back for administration, CWB benefit/other costs and finally some which is paid back to the farmer as the year end top up. Put another way, a malt barley cash sale is matched directly against a farmer payment. No matching across a pooling year, no hedging, etc so no pricing risk. Is a risk (actually a reality) all farmers will get paid something different so has moved a long way from the concept of pooling.

[Burbert]

Cashplus is okay, if yous live right next door to the maltie, git up each morning and say hello. It apparently sucks though for those up country, who are at their mercy when loads arrive at the pit. A kernel of ergot, mold, heated, chitted, sign of frost, mouse turd, moisture % off,and guess what the grain is REJECTED and sent home, or across the road, to their favorite cow guy. Now thats what I call a very, very, very, good Ag program. Yup its Cash plus all the way from now on, since it is built on a buddy system, nothin better, for us good farmers....

[Hopperbin]

Burbert you have one thing right, the farmers that deliver them good grain become their friends. I have heard a lot of farmers complain about rejected grain but mostly it is the farmers own fault. Perhaps he should have been watching his bin, turned the aeration fan on, turned it, submitted a proper sample in the first place. There is that risk when delivering to a local Maltster.

[classicalliberal]

I don't know, I think those of you should take these maltsters to National Grain & Feed Association arbitration, Anheuser Busch is a member, not sure about the Canadian Maltsters, althouth they are owned by Viterra and they are a member.