Keystone Agricultural Producers advises farmers to utilize sound business practices when selling grain, especially if it’s to a company they have never dealt with before.
“The open marketing environment means that producers are now dealing with companies they don’t know,” said KAP president Doug Chorney. “In addition, with the current price differentials between local elevators and the ports, more producers are choosing to get their grain to buyers at the ports or in the U.S., often on producer cars.”
Don McLean, a KAP member at Manitou who is involved with the producer-established Boundary Trails Rail Company, a shortline providing producer cars, says they’re seeing many grain companies they’ve never heard of.
“Once your grain leaves, you have no control unless you have all your ducks in a row,” McLean said. “Even if you trust the buyer, you need to follow that handshake up with a solid contract. Selling grain to a company you’ve never heard of without a contract is not smart business.”
KAP recommends producers use the following checklist when selling grain:
- Check on the Canadian Grain Commission website to see if the company is licensed with the CGC. As a condition of licensing, a company must provide security to the CGC, which will be used to compensate producers in the event they are not paid for the grain they deliver to that company.
- Insist on a contract, and read the details before signing. In particular, see what the deductions are for changes in grade.
- Before shipping, keep grain samples and have them graded by an independent third party for reference, in the event of a dispute. The CGC also provides this service.
- Be aware that paperwork must be completed with the CGC before a producer car can be issued. Generally, the grain buyer does this, but it’s a good idea to ensure it’s been done.
