What is in this article?:
- Farmers react to Producer Rice Mill pricing pool termination
- 'A problem I didn't need'
- Inventory loan
- Mill's pricing pool termination puts farmers in bad spot.
- Amplifies young farmers' worries.
- Arkansas Rice Growers Association leadership reacts.
'A problem I didn't need'
One of Producers’ young farmer members (who, like other unnamed sources in the story, is reluctant to be named: “I still have to do business in this area and I don’t want to burn bridges,” says one) claims “We’re going to find a way through this. But this is a problem I didn’t need.
“It’s very, very difficult to get established in farming. Most young farmers use FSA services to borrow money. Unless your daddy left you with 2,000 acres and a bunch of money — and that isn’t the case with me and the farmers I run with — this is going to affect you.”
Working with the FSA’s guaranteed program means “you have to pay out before you start another year,” says another young farmer. “Normally, I’d never put my rice in the pool and have always sold it out — by next February I have to have it all paid out.
“My best friend had a bunch of rice at Producers. He hadn’t sold any and was holding it in the expectation that the price would rise. The (termination) nailed him.”
Recently, he says, “we were looking at $5.40 per bushel. After drying and everything else, I got (about half that). The next advance, or two, will pay me out.”
But that leaves no money for the winter. “I’ve got a family to provide for and I’m back to working this winter, trying to pay the bills.
If I could have sold my rice at $5-plus, I’d have had some extra money to live on through the winter until the next crop. I’m now in a serious crunch.”
None of the young farmer’s neighbors put their rice in the seasonal pool willingly, he says. “Maybe someone, somewhere, did. But everyone I know was holding their rice because it would take more than the first advance to pay the bills.”
Graves wonders how bankers are looking at the situation. Some growers “can’t pay out and it isn’t due to anything they did wrong. What’s the bank going to do? Roll the note again?”