Published on: 17:28PM Nov 25, 2008
Corn grower Ron Litterer is one of the unfortunate farmers who has an outstanding contract to deliver corn to VeraSun Energy Corporation, which filed for bankruptcy earlier this month.
Now Litterer – a Greene, Iowa farmer who is also Chairman of the National Corn Growers Association (NCGA) - is worried that VeraSun’s proposed procedures under bankruptcy will allow the ethanol producer to wait until 10 days before contracted delivery date to notify growers of a rejection of grower contracts. This would essentially leave corn suppliers in a state of limbo while VeraSun is free to determine the market price for corn before deciding whether to accept deliveries under a contract or summarily reject the contract.
Litterer believes this would be fundamentally unfair to corn growers and other corn suppliers. He and others have filed a formal objection with the U.S. Bankruptcy Court in Delaware regarding the proposed disposition of corn contracts by VeraSun Energy Corporation. Potentially thousands of corn growers from Indiana, Iowa, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and other states have contracts with VeraSun, according to NCGA.
What is interesting is that Litterer doesn’t really believe these legal steps will make a hill of beans difference when it comes to getting VeraSun to pay the contracted price for corn.
“It is doubtful that we can influence the courts to require VeraSun to pay the contracted price for our corn. However, we do hope to influence other issues of concern to growers,” Litterer said in a NCGA statement.
By filing this objection, Litterer and a committee of producers from other states hope to serve as a voice for corn growers and advocate for corn suppliers’ interests with the Court. Further, they hope to help keep corn growers informed regarding the process and activities of VeraSun.
I’m not sure legal steps are the best solution right now, but the action does place farmers’ interests in the forefront of VeraSun’s restructuring. Stay tuned….