Corn Breeding in the 20th Century

COMMERCIAL ALCOHOLS INC. CORN SUPPLY AGREEMENTS

OCPA commends a recent effort by Commercial Alcohols Inc. (CAT) to expand the volume of Ontario corn purchased directly from Ontario producers. At a July 15 meeting in Chatham, Corn Supply Contract Agreements were introduced by CAI to an audience of regional corn producers. The concept is that individual producers would sign a Corn Supply Agreement directly with CAI to deliver a specified quantity of corn in weekly deliveries to the Chatham ethanol plant scheduled as much as 12 months in advance.

There are several pricing options:

Basis fixed. Upon delivery, the producer could receive the previous 4-week average FOB farm price for the Chatham-Kent area, less the average daily Chicago Board of Trade price, plus 25 cents delivered to Chatham. In addition, a premium for storage and delivery 9-12 months out will also be paid.
Basis and Futures fixed. The producer can also fix the CBOT price and would receive the previous 4-week average CBOT daily close plus the basis determined as above.
Flat price fixed. The producer can fix a flat price up to 3 months in advance on a specified minimum delivery volume.

Corn must be priced before delivery. Producers at the meeting had several suggestions for changes and additions and were encouraged by CAI to submit more ideas. CAI is finalizing details and additional options. With currently less than 20 growers selling directly to the Chatham ethanol plant, these Corn Supply Agreements would appear to be of interest to many more producers when finalized.