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FOR
IMMEDIATE RELEASE
NCGA Initiative Highlights True Cost of High-Value Grain Contracts
Producers typically underestimate their costs that can often exceed
premium paid
February
27, 2003
CHARLOTTE, N.C.,
February 27, 2003 – The National Corn Growers Association unveiled
today at Commodity Classic a new online education initiative focused
on educating commodity producers on the true costs associated with signing
high-value grain contracts.
The program “Making
Identity Pay: Calculating Producer Cost of High Value Grain Contracts”
is an online calculator created in response to a growing trend of producers
underestimating their true costs for items such as time, labor, yield
drag, segregation, handling as well as additional production costs and
risk. The calculator can be accessed at www.ncga.com.
“There are
costs involved with delivering to the requirements set by high-value
grain contracts and that’s why processors will often pay a premium,”
says Tom Slunecka, director of development for NCGA. “But we want
producers to understand that a 25-cent premium may not be enough to
justify the additional risk and expense that these contracts require.”
Slunecka says the
“Making Identity Pay” calculator breaks costs into five
core categories: time and labor; production; yield; segregation and
handling; and risk abatement. The calculator provides producers an average
cost-per-bushel for each category and allows for costs to be manipulated
according the specifications of a producer’s operation. Once costs
have been entered for each category, the calculator provides a bottomline
cost-per-bushel that producers can use as a basis for their contract
negotiations. And “Making Identity Pay” is intended to be
as much a negotiation tool as it is an education vehicle.
Wisconsin corn producer
Jim Zimmerman, who also is a member the NCGA biotech Working Group and
partner in a grain merchandising operation, says producers need more
leverage in contract negotiations and “Making Identity Pay”
will provide them a starting point.
“Producers
need a bargaining chip,” says Zimmerman. “ ‘Making
Identity Pay’ ” lays out the true costs of contract expectations
so if they’re not being offered enough, they have a vehicle that
explains why.”
“Making Identity
Pay” can be accessed for no charge on the NCGA web site and will
also be made available on a CD-ROM for purchase after April 1, 2003.
For more information, interested parties may contact Tom Slunecka at
National Corn Growers Association at 636-733-9004.
# # #
The National Corn
Growers Association mission is to create and increase opportunities
for corn growers in a changing world and to enhance corn's profitability
and usage. NCGA represents more than 32,000 members, 25 affiliated state
corn grower organizations and hundreds of thousands of growers who contribute
to state checkoff programs.
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