What is in this article?:
- Mill board chairman: pool termination all above board
- All options considered before action was taken.
Several dark rumors and timeline questions have followed in the wake of the Oct. 26 termination of the pricing pool at Producers’ Rice Mill.
Having placed the co-op members’ rice in a seasonal pool, the Stuttgart, Ark.-based mill’s leadership now faces a backlash of anger borne of frustration as farmers try to meet financial obligations. There is no doubt they will have a tougher time doing so now.
For more, see Farmers react to Producer Rice Mill pricing pool termination)
Late Tuesday afternoon, Delta Farm Press spoke with Gary Sebree, chairman of mill’s board. Sebree set no ground rules and answered all questions put to him. Among his comments:
Did any of the board profit from the knowledge that the pool termination was coming?
“I did know the (Oct. 26) meeting was going to take place because I’m chairman of the board. Keith (Glover, mill president and CEO) and I talked last Monday (prior to the Tuesday board meeting when the termination action was taken) about calling a meeting.
(For more with Glover, see Producers Rice Mill CEO: crop quality forces pool termination )
“To preface this, (the termination) wasn’t a knee-jerk reaction. A few weeks ago, Keith and I had been talking about the milling quality and peck damage. He was uneasy about what was happening in the mill and sent me some information on how the milling was…
“He called me on Monday (Oct. 25), wanting to know if I could come (with Jerry Hoskyn, the mill board’s vice-chairman) to the office and visit. Kent Lockwood, our chief financial officer, was also there. We got together about 2:00 on Monday afternoon and Keith laid out, more or less,” the factors outlined in the letter sent to farmer members explaining the termination. “After that, my mind was made up real quick that we needed a board meeting.”
(For full text of the letter, see letter )
On timing the meeting…
“One thing we decided was to hold it after the Chicago Board of Trade closed.
“The way our pricing pool is set up, you can only market rice while the CBOT is open for trade. The reason for that is we try to take a true hedge. A farmer can tell you, ‘I will sell,’ but until we confirm on the board that we can cover however many contracts he wants to sell, it isn’t (finalized). The sale is contingent on being able to cover it on the Chicago board.
“Keith and I also discussed how we’d get the board members to the meeting. Normally, you send out a notice saying a special meeting (has been called). We all decided the meeting would be held the next day (Tuesday) after CBOT closed. Second, he’d tell the board we had an issue to deal with that would be explained when they came.
“So, the board didn’t know what the meeting was about until they showed up. Obviously, (Hoskyn and) I knew but the rest didn’t. And in the motion (to terminate the pool), we noted that the pool was officially closed at 3:20 that afternoon.”