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3 Changes For Cargill Contracts

Cargill has three changes for its specialty oil canola production contracts for 2010. The company will now take 100 per cent of production. It, has made improvedements to the risk-free price hedge option and the risk-free basis program. And it and now offers growers the choice of either a Premium or a Prime Basis contract.

1. NO PRODUCTION LIMITS

Farmers sign up a specific number of acres and Cargill guarantees to take delivery of 100 per cent of production from those acres. The catch is that you’ll have some limits as to when delivery will happen. Chris Aud, crop production director with Cargill Specialty Canola, says farmers will be able to deliver up to 27 bushels per acre (bu./ac.) of production within their selected delivery period. Production beyond 27 bu./ac. will be accepted for the 2010 contract, but Cargill cannot guarantee the same delivery window.

2. PROTECTION FOR PRE-PRICING

The risk-free price hedge comes into play in the event of a crop failure due to weather, such as hail, frost or drought. Farmers who choose to price a portion of their production from now until next summer can rest assured that in the event of an Act of God crop failure, Cargill would cover them against the futures market for up to 10 bu./ac. of production. “For growers who sign up more than 960 acres worth of production, Cargill will assume the price risk change on up to 15 bu./ac.,” Aud says.

3. PREMIUM OR PRIME BASIS

Cargill specialty canola growers can also now choose what type of contract they want to enter. You can chose to take with a choice of either a premium over the generic canola basis or chose a a risk-free basis with the premium built in. This second choice is in called a Prime Basis. Aud says “Many farmers have a strong opinion on what the commodity basis is going to do,” Aud says. “With the Premium contract option, farmers have until seven days prior to their delivery period to lock in a generic canola basis and apply their premium to that basis.”

As always, producers choose delivery window options when they take out a contract.

For 2010, growers can choose from three hybrids: Roundup Ready Victory v1037, LibetyLink InVigor Health 1141 or LL InVigor Health 1145. For more information, visit www.victorycanola.comor call 1-888-855-8558.

Lyndsey Smith is a field editor for Grainews. She lives in Lumsden, Sask. Email her at [email protected]

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