Posted by paul on October 31, 2010 at 18:32:39 from (66.44.132.120):
In Reply to: Grain contracts posted by Reid1650 on October 31, 2010 at 16:56:01:
Many times grain values go down at harvest, and you woulda still been in real good shape - either buy grain from neighbors & deliver, split the difference with your neighbor of what your contract made over current prices; or talk to the coop/ buyer & work out a buyout of the contract, you sometimes gain a little cash even if you can't cover the contract.
But this year is topsy turvey, and they will really want their cheap grain, they won't easily let you out of the contract for free. Beans are expensive now, they want the cheap stuff you agreed to bring in.
I'd have talked this over with your buyer/ elevator in spring after planting, and you coulda worked it out then a lot cheaper than now. It really is best to keep communications open with these buyers, and let them know what is going on/ happening. Likely this will be a business you want to work with for many decades to come; you don't want to slam them with surprises, but let them know as soon as you do that there is a problem.
Most of the time most of these folk will work something out with you. Allow you to roll the contract into next year for a little bit of extra money from you. Or let you buy out the contract for the difference of today's prices compared to what you contracted for.
But, the sooner you talk to them, the more options they will have, and the more willing they will be to work with you.
Don't hold back & put this off. Talk to them. Sooner is better. Work with them. You will want them to like you decades from now. Being open about it, early on, let them give you options, will help you down the road.
If you wait until the last day of the contract, and don't deliver - then they will have space reserved in their storage, they will be expecting your beans so they can deliver them on to their contracts that they made, and you put them in a bad place. Then they kinda sorta enforce the wosrt parts of the contract against you.
If you'da mentioned this to them in June, they coulda planned, and would have worked with you a little easier.
Not trying to be hard on you, just - think about it from their side, and then it all comes a little clearer.
They likely will work with you & make it easy to pay out the missed bushel difference, or roll the contract into a future year for some dollars. But you hit a bad year, where this will cost you a bit, and will likely cost them a bit too.
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