What is in this article?:
- Drought could lead to crop delivery problems
- Contract shortage
- As a farm producer who has a delivery contract, you need to know the exact terms of that contract and what will be the impact of not having enough bushels to cover that contract if your crop fails.
These contracts are normally with firms that use the corn or soybeans in product production. Because they would be forced to go out and find any bushels you are short in your contract, they have put that responsibility on the producer.
Finding and purchasing bushels in a short crop year may not be easy and can become very expensive very quickly.
It is common for local producers to hold back on selling their harvest in a short crop in hopes of higher prices later in the marketing year. This adds to the difficulty in finding bushels of commodities to purchase and deliver to fulfill your contract.
Why start looking at options now? It is always a good business practice that if you see a potential problem in making full delivery of your crop bushels or making your delivery in a timely manner that you inform the firm that holds the contract.
Go over the situation, fully review and understand your obligations. Then work with the firm to map out options and strategies that will help you meet the contract requirements.
The theme here is to dig out your contract and read the fine print today and work to develop a strategy of what options you have and what it will take if your 2012 crop falls short of the bushels needed to fulfill your contract obligations.