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Serving: WI
Caution When Selling Organic Grain

Caution When Selling Organic Grain

DATCP recommends best practices for producers.

The Wisconsin Department of Agriculture, Trade and Consumer Protection warns organic grain producers to exercise caution when selling their products both in and out of state.  Since the organic market is less developed than the conventional markets, producers should take steps to ensure that their grain sales are successful.

"Some Wisconsin organic farmers are reporting their grain loads are being rejected at out-of-state delivery points for reasons including poor quality and low test weight," said Paul Dietmann, Director of DATCP's Wisconsin Farm Center.  "Whether these complaints have merit, at this point, a producer's only options are to sell at conventional prices or pay to have the grain hauled back home."

Wisconsin law offers protection for producers who sell grain to buyers who are licensed by DATCP to procure grain in Wisconsin. That protection includes requiring buyers to follow terms of contracts and requiring buyers to pay for grain in a timely manner. If buyers fail to pay for grain, there is an indemnity fund that may cover producers for a portion of the loss. However, buyers who are procuring grain for delivery out-of-state may not be regulated by DATCP. Therefore, producers who sell to those buyers may not be protected under Wisconsin law.

"We recommend producers contact grain officials in any state they are doing business to find out about protections in those states," said Eric Hanson, Chief of DATCP's Agricultural Producer Security Section. "Be it in Wisconsin or out-of-state, the best way for a farmer to avoid buyer misrepresentation is to insist on an official third party inspection. However, the cost of getting an inspection can be a deterrent."

DATCP recommends these best practices when selling organic grain:

• Insist on a written contract for your grain sale and note the conditions under which grain can be rejected.

• Many states license and regulate grain buyers. Check with grain regulators in any state you are considering selling grain.

• If an out-of-state buyer is picking up grain on your farm, have it sampled and inspected by a Federal Grain Inspection Service authorized service provider before it leaves. Cost for the inspection varies based on your location, but the Eastern Iowa Grain Inspection charges $8.80 plus the hourly rate for travel to take a sample from the truck.  Sampling or inspecting grain yourself may not be sufficient to challenge a load rejection.

• If you are responsible for transporting grain, either with your own truck or a third party hauler, insist that an official grain inspection certificate be issued when the grain reaches its destination.

 "In addition to these recommendations, DATCP is contacting organic grain dealers who advertise in Wisconsin and providing them with application materials to become licensed in our state," added Dietmann. "The licensing process is simple and relatively inexpensive depending on the volume of grain being procured here." 

For a list of Wisconsin-licensed grain dealers, visit http://datcp.wi.gov/Business/Agricultural_Producer_Security/Grain/Grain_Dealers/index.aspx.  Scroll to the bottom of the page, and click on the link, "Licensed Grain Dealers." 

For a list of authorized Federal Grain Inspection Service providers, visit http://www.gipsa.usda.gov/GIPSA/webapp?area=home&subject=fc&topic=fsp.

To report a problem you have had with a load rejection or selling organic grain in or out-of-state, contact Eric Hanson at 608-224-4968 or eric.hanson@wi.gov;  or Paul Dietmann at 608-224-5038 or paul.dietmann@wi.gov.

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