A new contract agreement developed by Teagasc aims to provide a structure for which tillage and livestock farmers can negotiate forage cropping agreements. Launched last week, it sets out a number of agreements.
This spring, livestock and tillage farmers are being urged to develop mutually beneficial fodder supply agreements. This new agreement covers maize and beet forage crops and is divided into four sections.
A new contract agreement developed by Teagasc aims to provide a structure for which tillage and livestock farmers can negotiate forage cropping agreements.
A new contract agreement developed by Teagasc aims to provide a structure for which tillage and livestock farmers can negotiate forage cropping agreements.
Grower and purchaser details
In the first section, the grower and the purchaser of the forage crop sets out their names, addresses and PPS numbers. Once the rest of the document is filled out, both parties sign this section.
Payment terms, land and storage
Section two sets the price paid per tonne and payment schedule. The agreement states that payments shall be made in three instalments – at the time of sowing, around mid-season and at the time of delivery of the crop. Guidelines for estimating the price for maize and beet are included in the contract:
Maize: Prices are paid on a fresh weight basis and work on the assumption of a dry matter (DM) of 27% and starch content of 26% to 32%. As the cost of production on a per-acre basis increases, so too does the price paid per tonne. For example, growers producing a 20t/ac crop which costs €900/ac to grow would charge €45/t delivered. Where production costs rise to €1,200/ac, the cost per tonne rises to €60/t.
Beet: Beet prices are calculated on a DM basis. As the DM of the beet increases (variety-dependant), the price per tonne of beet increases. Calculations in the agreement are derived from the relative value of €35/t at 20% DM or €175 t/DM. Additional agreements may be made for the washing and delivery of the beet.
Bank account details, location of crops, storage areas and details of a nominated facilitator should a dispute arise are also required in this section.
Crop and soil details
The third section outlines the details of the forage crop grown, such as the variety, estimated yield, expected harvest date, as well as the cropping history and recent soil sample results for the fields used to grow the crop.
Terms and conditions
The final section outlines the general legal terms and conditions of the agreement in order to provide clarity, in writing, about the rights and obligations of each party in the contract. As both parties have agreed to financial consideration, the contract is legally binding.
The grower is expected to grow the forage crop to best practice standards and cover the cost of all inputs, unless otherwise agreed. The grower is expected to harvest and transport the crop (unless a contractor is hired by the grower). The storage is provided by the purchaser, who will cover the crop if necessary. At least two trailer loads of the crop will be weighed at a certified weigh bridge as a reference for calculating delivered tonnage.
Late payments by the purchaser will carry an interest payment of 1.5% per month until paid in full. The forage crop will remain the property of the grower until full payment is made by the purchaser. Where the agreed quantity of the crop is not achieved or delivered, the grower will have to source a replacement crop.
Where a dispute arises, this will be referred to the nominated facilitator or to an appointed conciliator.
Teagasc stresses that this contract needs to be tailored to suit the needs of both parties with their local adviser.
Read more
Planting options: what should I do now
Industry urges livestock and tillage collaborations
A new contract agreement developed by Teagasc aims to provide a structure for which tillage and livestock farmers can negotiate forage cropping agreements. Launched last week, it sets out a number of agreements.
This spring, livestock and tillage farmers are being urged to develop mutually beneficial fodder supply agreements. This new agreement covers maize and beet forage crops and is divided into four sections.
A new contract agreement developed by Teagasc aims to provide a structure for which tillage and livestock farmers can negotiate forage cropping agreements. A new contract agreement developed by Teagasc aims to provide a structure for which tillage and livestock farmers can negotiate forage cropping agreements.
Grower and purchaser details
In the first section, the grower and the purchaser of the forage crop sets out their names, addresses and PPS numbers. Once the rest of the document is filled out, both parties sign this section.
Payment terms, land and storage
Section two sets the price paid per tonne and payment schedule. The agreement states that payments shall be made in three instalments – at the time of sowing, around mid-season and at the time of delivery of the crop. Guidelines for estimating the price for maize and beet are included in the contract:
Maize: Prices are paid on a fresh weight basis and work on the assumption of a dry matter (DM) of 27% and starch content of 26% to 32%. As the cost of production on a per-acre basis increases, so too does the price paid per tonne. For example, growers producing a 20t/ac crop which costs €900/ac to grow would charge €45/t delivered. Where production costs rise to €1,200/ac, the cost per tonne rises to €60/t.
Beet: Beet prices are calculated on a DM basis. As the DM of the beet increases (variety-dependant), the price per tonne of beet increases. Calculations in the agreement are derived from the relative value of €35/t at 20% DM or €175 t/DM. Additional agreements may be made for the washing and delivery of the beet.
Bank account details, location of crops, storage areas and details of a nominated facilitator should a dispute arise are also required in this section.
Crop and soil details
The third section outlines the details of the forage crop grown, such as the variety, estimated yield, expected harvest date, as well as the cropping history and recent soil sample results for the fields used to grow the crop.
Terms and conditions
The final section outlines the general legal terms and conditions of the agreement in order to provide clarity, in writing, about the rights and obligations of each party in the contract. As both parties have agreed to financial consideration, the contract is legally binding.
The grower is expected to grow the forage crop to best practice standards and cover the cost of all inputs, unless otherwise agreed. The grower is expected to harvest and transport the crop (unless a contractor is hired by the grower). The storage is provided by the purchaser, who will cover the crop if necessary. At least two trailer loads of the crop will be weighed at a certified weigh bridge as a reference for calculating delivered tonnage.
Late payments by the purchaser will carry an interest payment of 1.5% per month until paid in full. The forage crop will remain the property of the grower until full payment is made by the purchaser. Where the agreed quantity of the crop is not achieved or delivered, the grower will have to source a replacement crop.
Where a dispute arises, this will be referred to the nominated facilitator or to an appointed conciliator.
Teagasc stresses that this contract needs to be tailored to suit the needs of both parties with their local adviser.
Read more
Planting options: what should I do now
Industry urges livestock and tillage collaborations
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