Jul 12, 2022

UGC Offers Drought Protection Contract to Producers

Producers who lose their entire crop yield to drought can be released from obligations to deliver grain

About 80% of Montana is in a severe or extreme drought and its continuation could make 2022 the state’s second consecutive year of reduced grain production.

Amid these conditions, United Grain Corp. (UGC) is offering its producers its new Profit Partner Protection Plus contract, an agreement where producers who lose their entire crop yield to drought can be released from obligations to deliver grain.

“Our efforts to bring high-quality grains to overseas customers depend on the products of our producers, and their cultivating relies on ideal growing conditions,” said UGC Hedge Desk Manager Rob Froom.

“This year’s drought has made growing difficult for many of our producers, so we are pleased to offer them a contract that will reduce pressure if it prevents them from producing anything.”

Producers impacted deeply by western drought

UGC feeds the world by connecting producers in the northern U.S. with global buyers in the Asia-Pacific region, but last year saw some of UGC’s producers in eastern Montana, North Dakota and Minnesota unable to deliver any grain due to drought.

To provide security for its producers should they experience this in the future, UGC formulated the Profit Partner Protection Plus contract.

This agreement provides producers with a less risky contract through which they can set a price floor in the futures market and not have to worry about Mother Nature cooperating.

In the event of a crop failure, producers could potentially be out the cost of their price floor but the obligation to deliver their contracted grain is canceled.

Contract protects against other natural events

In addition to drought, UGC’s Profit Partner Protection Plus contract also applies if entire crop yields are destroyed by natural events from hailstorms to insect infestations.

“UGC is dedicated to feeding the world safely and we recognize the challenges that our producers go through to help us achieve that goal,” said Froom.

“With our Profit Partner Protection Plus contract, producers can make it through this difficult growing period without worrying about delivering should they lose all their crops.”

Feed & Grain Staff

Sponsored Items

Recently Added to Buyer's Guide

AgraStrip Pro GMO Rapid Test Kits

  • Independent, simultaneous testing of up to four samples
  • Limits of detection as low as 0.1%

Granulex 5

  • Up to 30% reduction in energy consumption per ton
  • Connects to Bühler Insights to enable 24/7/365 data-based decision making

Automated Extrusion Control Systems

  • Designed for increased efficiency, higher production rates, reduced waste
  • Consistent results and quality across production lines, shifts and plants

Catwalks & Towers

  • Includes handrail trusses, outrigger trusses, and walk-thru truss style catwalks with standard spans over 200 feet
  • Welded sections and panels allow for easy field assembly while maximizing freight

Market+ Merchandise

  • Bid Management to upload or enter bids, easily adjust basis and other details, and publish to originators and farmers
  • Competitive insights to see how bids compare to other nearby bids

Hydro-Mix XT-FS Sensor

  • Designed to measure moisture in flowing material where there is a food safety requirement
  • Installed in ducting, conveying and mixing systems in process control environments

Magazine

Marketwatch: Dec, 07

US Corn Price Idx: ZCPAUS.CM

open: 6.4991
high: 6.5177
low: 6.4184
close: 6.4282

US Soybean Price Idx: ZSPAUS.CM

open: 14.2941
high: 14.4996
low: 14.2733
close: 14.321

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 8.0349
high: 8.0428
low: 7.8495
close: 7.9226

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 6.7248
high: 6.7647
low: 6.5668
close: 6.6198