New Crop Contracting Underway
Friday, December 15, 2006
filed under: Marketing/Risk Management
The race for 2007 acres is ‘on’ and a number of new crop contracts have been announced with several delivery options, and many including an Act of God clause.
Cargill’s oilseed crushing plant located in Fargo N.D. came out with 2007 bids at $14/cwt for both NuSun® and conventional sunflower with variable delivery periods. Cargill also came out with a $13.50 October/November 2007 delivery for farmers who do not plan to store sunflower.
ADM in Enderlin, N.D. came out with four options this fall for farmers to market their 2007 sunflower crop. Producers can choose an average price of $14/cwt broken into two equal delivery periods. The first half is at or near harvest and is priced at $13.50 and the second half delivery is made later in the season at $14.50. The split delivery option is also available with an Act of God clause that offers an average price of $13.75/cwt. If a farmer is not interested in the split delivery option, they can contract for harvest delivery at $13.25 for cash or $13 with an Act of God clause.
In September, the ADM crushing plant in Goodland, Kans., came out with a 2007 new crop price of $14/cwt with an Act of God clause, adjusted to $13.75 as of mid November. Competition for acres in the High Plains with winter wheat encouraged a much earlier than usual Goodland announcement.
Dahlgren & Company, Inc. with processing facilities in Crookston, Minn., Grace City, N.D. and Fargo, N.D., announced 2007 new crop prices for confection and huller variety sunflowers. The contracts are for 1,000 pounds per acre with an Act of God clause. The pricing will be based upon the delivery period a producer chooses. For confection sunflowers, prices range from $18.00 to $18.60 depending upon delivery period. For hulling sunflowers, prices range from $15.00 to $15.60 depending upon delivery period.
Red River Commodities came out with new crop quotes for confection sunflower: Contracts for delivery to the Fargo plant are being offered at $18/cwt for all size seed production or a split price contract of $20 for seeds remaining over a 20/64 round hole screen and $13 for seeds falling through a 20/64 round hole screen. The Colby, Kans. plant is offering split price contracts in a range of $19-$22/cwt for seeds remaining over a 20/64 screen and $12-$14 for small seed depending on delivery times and location.
CHS Sunflower in Grandin, N.D. and Hazel, Minn., was the first confection processor to come out with new crop bids, averaging $18/cwt as of mid November.
Colorado Mills, Lamar, Colo., has new crop quotes of $13.75 for NuSun and $14.75 for high oleic contracts. New high oleic sunflower processor High Plains Oil Seed, Etter, Tex., came out with $15/cwt high oleic contracts.
SunOpta Sunflower, with offices and processing locations in Breckenridge, Minn. and Goodland, is now offering new crop bids, and Technology Crops International was planning to begin contracting acres by the end of November. “There really seems to be a feeding frenzy for acres, in commodities like corn and beans, therefore we realize that to attract acres, we’ll need to be fairly bold with our contracts. That’s our intention, and I think our growers will be very pleased,” says Andrew Hebard, president and CEO of TCI, which contracts high oleic sunflower. “We’re seeing an increase in our demand, and our acreage requirements will be up from last year. We’re looking forward to a good campaign.”
Crop producers interested in growing sunflower are encouraged to check out their new crop pricing options at local elevators, as well as with the various companies and processors that contract sunflower. Keep in mind that contract terms and price, as well as the number of contracts offered, can change quickly depending on grower response to new crop bids.
The best online resource for tracking new crop sunflower bids is www.sunflowernsa.com – go to the ‘Growers’ link for daily market news, a list of buyers and sellers, and a list of elevators that buy NuSun, from Texas to North Dakota. – Tracy Sayler
Paterson Grain to Contract NuSun in Canada for ADM
Paterson Grain, which operates a network of country elevator stations, inland export terminals and crop input locations throughout Western Canada, will be contracting for NuSun sunflower in Manitoba and Saskatchewan in 2007.
The sunflower will be processed by ADM in Enderlin, N.D. Paterson Grain’s arrangement with ADM represents the first significant contract offering for NuSun in Canada, and helps ensure a steady supply of mid-oleic sunflower oil to meet rising demand for the oil.
“I think ADM was looking to expand its market penetration to a wider geographic area, and we saw a need in the marketplace for the grower-customer to have a local contractor. Paterson handles a lot of IP crops, and so this fits well into what we do,” says Garry Van Den Bussche, sales and marketing manager with Paterson Grain crop inputs (www.patersongrain.com), which is headquartered in Winnipeg.
“We’ll have our own contract, and have an arrangement with ADM to supply them with a certain volume of product that they need for their local crush,” says George James IP grain contracting manager for Paterson Grain. The contract will have an Act of God clause, with a bonus in the price structure for inputs purchased from Paterson Grain. The company is contracting for production of one hybrid, Defender Plus.
“If we’re going to get into this, we wanted something that’s going to work well agronomically as well as with our price structure and delivery,” says Van Den Bussche. “We researched a variety that would fit, an early hybrid with decent oil and a good disease package with downy mildew resistance, and this is the only NuSun available in Canada with that package.” “In addition we will be offering bonus pricing for growers contracting Defender Plus and purchasing inputs from Paterson Grain”– Tracy Sayler