Price Later Contract: Fall 2012 through Fall 2013 02/21/14 2:56:49 PM|
A price later contract (also known as a Delayed Pricing Contract or No Price Established Contract) allows producer to move grain without establishing a price. Title to the grain passes to the buyer upon delivery, unlike storage. The service charges are based on market differentials and may or may not be less than storage charges. Contract good for one year, ending 365 days after the contract date, and can be renewed at the service charge and drying rate of the current year. Producer recieves Prairie Ag Coop price at the time of pricing and can be sold in any bushel amount. Subject to the current discounts and policies established at Prairie Ag Coop.
Price Later Advantages:
- Quality risk passes to buyer upon delivery.
- Allows Elevator to move grain when they have time and then producer can sell it in any bushel amount when they decide.
- Can make delivery while avoiding historically low prices.
- Corn will be dried to 15% vs. 14% on storage and warehouse receipts.
Price Later Risks:
- Subject to CBOT price changes
- No payment until contract is priced
- Title passes to buyer upon delivery.
Service charge and Drying Rates:
- 13 cents per bushel for 90 days, then $.001 per bushel per day each day thereafter. Service charge will never exceed more than 30 cents per bushel allowing for approximately 5 months of no service charge. Corn will be dried to 15% moisture instead of 14% for warehouse receipts.
- 15 cents per bushel for 90 days, then $.001 per bushel per day each day thereafter. Service charege will never exceed more than 30 cents per bushel allowing for 5 months of no service charge.