Word no longer bond

A friend who’s a cropping farmer had signed up deals selling grain for winter feed to dairy farmers which they are now cancelling.

Earlier in the year the Farmers Weekly reports that dairy farmers were walking away from maize deals, leaving contractors with as much as a third of their crop unsold.

The milk payout has fallen and next season’s forecast is lower than this season’s. The price of grain has also fallen, but would these farmers have paid more had the price gone up after they’d signed the deal?

In our area we like to think we can still do business on a handshake, but thses examples show there is a growing number of people for whom their word is no longer their bond.

3 Responses to Word no longer bond

  1. Adolf Fiinkensein says:

    I suggest the industry should name and shame these people.

    Publish the names and addresses of the welchers so that when they come back into the market place they can be forced to pay at least 50% cash upon signing their contracts. Then, if they renege on half the crop, they lose half their deposit.

    Twenty five years ago, when I was dealing with hundreds of farmers each year, you could count on one hand’s fingers the number of seriously bad payors in the whole country. There were plenty who were slow but they ALL paid.

    Not any more.

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  2. I was wondering why there were all these fields of maize unharvested!

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  3. Ed Snack says:

    Presumable they have actionable cases, even a verbal contract is a contract, provided one can produce evidence of the terms. Certainly these defaulters will be penalized next time they enter any market of this type, that is, one assumes, that their names are indeed known and circulated.

    It does show, sadly, that it is always wise to get something down on paper (or its electronic equivalent) in any deal involving real money.

    Oswald, sometimes maize for stock food can be left for a surprisingly long time on the stalk provided the weather is reasonably dry. One would expect the harvesters to be moving soon, but it is a risk some take to avoid paying storage costs. I have seen it done successfully for quite some time last year.

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