NGFA Newsletter

Volume 51, Number 1, January 13, 1999

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Contents

Country/Terminal Corner by Randall c. Gordon Vice President, Communications/Government Relations

USDA Considering Changes in Marketing Loan Repayment Procedures

…Proposed Rule Expected; NGFA Country Elevator Committee to Develop Recommendations…

The NGFA has learned that the U.S. Department of Agriculture's Farm Service Agency is actively considering changes to its current procedures used to determine the alternative loan repayment rate and loan deficiency payment rates under the marketing loan program for grains and oilseeds.

The agency plans to issue a proposed rule on the matter in the next few months, and has established an internal goal of issuing a final rule by May 1 concerning any changes to the loan repayment procedures.

NGFA to Provide Input to FSA: NGFA Country Elevator Committee Chairman Don Ludwig, managing partner of Elkhart Grain Co., Elkhart, Ill., has appointed a five-member task force to develop recommendations for consideration by the full committee on potential changes the NGFA could suggest to FSA on how to improve its loan repayment procedures. The task force, which is chaired by John Anderson, general manager and chief executive officer of Central Washington Grain Growers Inc., Waterville, Wash., is scheduled to meet Jan. 14 in Chicago.

It is anticipated that initial recommendations will be developed and submitted to FSA by late January. Further, it is expected that FSA's proposed changes to its loan repayment procedures, if any, will be published in time to be discussed at the Country Elevator Committee's next meeting, scheduled for Saturday, March 20, during the 103rd annual convention at the Sheraton Palace Hotel in San Francisco. All convention registrants are welcome and encouraged to attend.

The NGFA's input on this important issue was requested by USDA/FSA Associate Administrator for Programs Parks Shackelford during a Dec. 6 meeting with the Country Elevator Committee in Fort Worth, Texas, in conjunction with the 27^th annual Country Elevator Council meeting. During the meeting, Shackelford said FSA would like to explore a "radical change" from the current method used to determine loan repayment rates for wheat, feed grains and oilseeds, which is based on posted county prices. USDA has received repeated complaints from producers, Congress and the grain industry about wide disparities -- amounting to 10 cents per bushel or more -- that occurred in the 1998 crop year in the loan repayment rates between counties and states. "We don't want to repeat this year's experience," Shackelford said.

Given current market conditions, USDA anticipates making loan deficiency payments for major commodities again in the 1999 crop year. The agency is exploring several options that are more simple, understandable, equitable and defensible, and present minimal risk of fraud and abuse.

FSA's Current Loan Repayment Procedures: FSA currently computes marketing loan repayment rates in the following manner:

Alternative Loan Repayment Rate (Marketing Loan Gain): This rate applies when producers obtain a nine-month non-recourse marketing assistance loan and the market price at maturity is less than the loan rate. For wheat, feed grains and oilseeds, this rate is based on the adjusted posted county price (PCP) in the county where the grain is stored -- either on the farm (for farm-stored loan) or at the warehouse (for warehouse-stored loan).

Loan Deficiency Payment (LDP): This rate applies when producers forego obtaining a nine-month loan. Two basic types of LDPs currently exist:

•Basic LDP: Applies to commodities that have been harvested and delivered for sale or storage, either to the farm or to a Uniform Grain and Rice Storage Agreement warehouse (warehouse receipts issued). The producer uses Form CCC-666 LDP. The LDP rate that applies is the rate in effect in the county where the grain is delivered/stored.

•Field-Direct LDP: Applies to commodities delivered direct from the field to a warehouse, processor, buyer or cooperative. The producer uses Form CCC-709. The LDP rate is the rate in effect on the date of delivery for the county location where the farm records are maintained -- in effect, the county where the grain is produced.

To calculate LDPs, FSA has relied upon posted county prices originally devised in the mid-1980s as a method to establish a value for Commodity Credit Corporation-owned inventory for sale. Generally, for all applicable commodities, each county and each commercial elevator having a UGRSA contract are assigned two terminal markets.

While designed to determine an approximate value as close as possible to the local cash market price in any given area, PCPs were not originally intended to be used to determine precise market price levels for loan program purposes. Generally, one of the assigned terminal markets represents a domestic market, while the other represents an export market. The PCPs are calculated daily based upon the previous day's closing cash market prices at 19 major grain terminal markets. Both "spot" and "to-arrive" sales and bids are obtained.

The prevailing PCP rate applied to each location is the higher of the two terminal calculated values. To "back off" the terminal prices to determine the county PCP, USDA uses "differentials" that are based on the yearly average differences between local cash prices and assigned terminal prices.

CCC merchandisers monitor the relationship between PCPs and cash on a weekly basis through formal industry surveys. Merchandisers contact 187 stations throughout the United States (primarily major production areas for each commodity) to obtain actual and nominal cash bids. Adjustments are made in an attempt to ensure that PCPs reflect a value "as close as possible" to the local cash market in any given area."

FSA provides daily PCPs (weekly for minor oilseeds) to approximately 3,000 counties for 17 commodities (corn, wheat, soybeans, sorghum, barley, oats and various minor oilseeds).

Options Under Consideration: Potential options for changing the current loan repayment procedures believed to be under consideration within FSA include the following:

Uniform National Loan Repayment Rate: Under this concept, FSA would determine a single nationwide loan repayment rate using a weighted average of cash market prices for each commodity. This rate could be adjusted daily, weekly, monthly or seasonally.

Loan Repayment Rate Based on Lower of Two PCPs: This option, proposed by the National Corn Growers Association, would base the loan repayment rate on the lower of the two PCP terminal market values, rather than the current procedure of applying the higher of the two values. The corn growers' organization maintains that this change would eliminate much of the existing disparity in LDPs across state lines.

Weekly Loan Repayment Rate Based on Five-Day Rolling Average Market Prices: This concept would set a weekly loan repayment rate based on a five-day moving average of cash market prices in an effort to avoid or reduce day-to-day fluctuations or aberrations in payment rates.

Loan Repayment Rate Based on Graduated PCPs: Under this scenario, FSA would continue to use a PCP-based approach, but would apply an as-yet-to-be-determined percentage factor that would reduce the variance in loan repayment rates between counties within a state, as well as between states.

Retain Current Approach. Of course, another option is for FSA to retain its current PCP-based approach.

Input from Members Welcome: The NGFA welcomes input from all members concerning this important issue. Contact Randall C. Gordon, NGFA vice president for communications and government relations, at (202) 289-0873, or through e-mail at rgordon@ngfa.org.

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CFTC Seeks Comments on CBOT's Revised Soyoil Delivery Rules

The Commodity Futures Trading Commission is seeking comments by Feb. 10 on the Chicago Board of Trade's proposed revisions to its soybean oil futures contract delivery terms.

The proposed contract changes were submitted under the agency's fast-track approval process, which allows them to take effect 45 days after receipt by the CFTC unless the agency takes a contrary action. The proposed contract changes include the following:

Require exchange-approved warehouse operators to limit their delivery capacity to 30 times the registered daily load-out capacity for the facility. By limiting loadout capacity, the CBOT said, soybean oil users will be able to take delivery more quickly.

Modify the procedures for determining delivery differentials by increasing the maximum annual adjustment from 10 cents per hundredweight to 20 cents per hundredweight. This change is designed to allow futures prices to better reflect the cash market, the CBOT said.

Require exchange-approved warehouse operators who are not served by a Class I railroad to pay costs to move soybean oil to the nearest Class I railroad interchange point, if requested by the taker of delivery. This change is designed to compensate takers of delivery for additional freight or switching costs, the CBOT said.

Submitting Comments: Comments should be submitted on or before Feb. 10 by writing to: Jean A. Webb, Secretary, CFTC, Three Lafayette Centre, 1155 21^st St., N.W., Washington, D.C., 20581. Comments also may be submitted to the CFTC by fax to (202) 418-5521 or by electronic mail to: secretary@cftc.gov.

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Important Survey of Members on Phosphine Planned

NGFA members will receive a confidential survey later this month from the NGFA's outside legal counsel -- Arent Fox Kintner Plotkin & Kahn -- requesting information on the operational implications of the Environmental Protection Agency's Dec. 23 proposal to impose stringent new controls on the use of phosphine as a fumigant.

Among other things, the survey will request factual information on the current uses of phosphine by country elevators; terminals; feed; corn and flour mills, exporters; and processing plants. It also will request information on whether the agency's proposed restrictions would make it legally impractical to use phosphine at individual facilities.

The NGFA strongly encourages members to respond to the survey when they receive it, as the aggregate information will be extremely important in developing the Association's official response to EPA on this major issue. Thanks in advance!

Among other things, EPA is proposing to:

reduce the exposure standard for phosphine gas to 0.03 parts per million (p.p.m.), significantly lower than the permissible exposure standard of 0.3 p.p.m. established by the Occupational Safety and Health Administration.

prohibit fumigation and aeration of structures or conveyances within 500 feet of residential areas.

establish a 500-foot "buffer zone" and restricted area around all structures or conveyances fumigated with phosphine. Prior to allowing entry into the buffer area, EPA proposes to require that monitoring be conducted to ensure the concentration of phosphine in the atmosphere is less than 0.03 p.p.m.

require notification of local residents and adjoining commercial and industrial sites that are within 750 feet of the fumigated structure.

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Convention Hotel Alert!

...Air Fares on Sale...

The deadline for making a hotel reservation for the NGFA's 103rd annual convention at the fabulous Sheraton Palace Hotel is Feb. 20. After Feb. 20, rooms will be available only at the prevailing daily rate, which could be substantially higher than the NGFA room rate. Don't run the risk of forgetting to make your reservation -- call the hotel today at (415) 512-1111.

Also be advised that several major airlines currently are offering special low fares to San Francisco. Check now with your travel agent or favorite airline to take advantage of significant savings!

For your travel planning purposes, here is some guidance on when to arrive and depart from the convention:

Suggested Arrival Date: Saturday, March 20. NGFA committees will conduct substantive work sessions and open forum meetings on Saturday and Sunday afternoons that will be open to all convention registrants. There's no better way to get an executive briefing on the most important issues confronting your business, and to share your views on how NGFA committees should address these matters.

Suggested Departure Date: On or After Wednesday, March 24. Plan to say for the Tuesday evening banquet and entertainment featuring the fabulous California Beach Band, whose members sing with the Beach Boys!

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CFTC Announces HTA-Related Settlement with The Andersons

The Commodity Futures Trading Commission on Jan. 12 announced it had entered a settlement order finding that certain contracts offered and entered into by The Andersons Inc. between Jan. 1, 1994 and Dec. 31, 1995 were illegal futures and option contracts under the Commodity Exchange Act and CFTC regulations.

The Andersons did not admit or deny the CFTC's findings, but consented to issuance of the order, which requires the company to do the following:

The Andersons "shall cease and desist from violating Sections 4(a) and 4c(b) of the [Commodity Exchange] Act, 7 U.S.C. §§ 6(a) and 6c(b) (1994), and Commission Regulation 32.2, 17 C.F.R. § 32.2 (1998)";

The Andersons will pay a civil penalty of $200,000 within 10 days of the date of the order; and

The Andersons "shall comply with its undertakings to: a) maintain its newly-established procedures whereby a committee co-chaired by its president of the Agriculture Group and its vice president of the Grain Division has the responsibility to review all new proposed types of HTA contracts and any type of contract involving option features it plans to offer to producers for the legality of such contracts under the (Commodity Exchange) Act and (CFTC) regulations; and b) not to take any action or make any statement denying, directly or indirectly, any statement in this order or creating, or tending to create, the impression that the order is without a factual basis; provided, however, that nothing in this provision affects Andersons' testimonial obligations, or its right to take contrary factual or legal positions relating to any proceeding to which the (CFTC) is not a party. Andersons will undertake all steps necessary to assure that all of its agents, attorneys and employees understand and comply with this agreement."

The CFTC enforcement proceeding against, and the settlement with, The Andersons were announced simultaneously. The CFTC's written order targeted several situations involving the use of "convertible HTA contracts" by seed corn producers and livestock producers where it said "no delivery to or from Andersons took place. In those situations, contracts were settled through a cash payment, there was no expectation of delivery to or from Andersons and the contracts were being used to shift risk," the CFTC order said.

The CFTC order also described "so-called `option feature contracts' which included short option features that, under certain circumstances, could result in additional grain delivery obligations for the producer."

CFTC Commissioner Barbara Holum filed a dissenting opinion objecting to the CFTC order instituting the proceeding. Among other things, Holum stated: "In my opinion, the hedge-to-arrive (HTA) contracts offered by The Andersons do not constitute illegal off-exchange futures contracts, but instead fall within the forward contract exclusion.…Although I would not object to settlement of a (CFTC) enforcement action in the ordinary course, I do not agree that the complaint should be issued. Therefore, I must dissent from the acceptance of the settlement."

Obtaining a Copy: The CFTC's press release and order can be obtained via the CFTC's Internet Website at: http://www.cftc.gov/opa/enf99/4229-99.htm; and http://www.cftc.gov/opa/enf99/andersons.htm.

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Rails, Rivers and Roads by David C. Barrett Jr., Counsel for Public Affairs

DOT Inspector General Finds Full User-Fee Funding of STB Unfeasible

Full user-fee funding of the Surface Transportation Board is not feasible because much of the work performed by the agency is beyond the scope of the federal statute authorizing user fees.

That was the conclusion of a report issued recently by the U.S. Department of Transportation's Office of Inspector General. The report conflicts directly with the Clinton administration's budget requests submitted for the past three fiscal years, each of which proposed 100 percent user fee funding for the STB.

While the inspector general's report appeared to support continued funding of at least some of the STB's functions from general appropriations instead of user fees, it also found that the agency currently does not have a cost-accounting system for identifying fee-related services and tracking costs. Further, the report concluded, the STB reduced 12 filing fees below the cost of providing those services. According to the report, this resulted in forgone revenue to the STB of $3.1 million for fiscal years 1996-99.

The report is a public document [Report No. CE-1999-021] that can be accessed through a link on NGFA's website at http://www.ngfa.org under the "What's New" section.

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DM&E Passes First Regulatory Hurdle for Building 280-Mile Rail Line

The Dakota, Minnesota & Eastern Railroad Corp.'s (DM&E) application to extend its rail system into the Powder River Basin coal fields in northeastern Wyoming has passed its initial regulatory hurdle.

The Surface Transportation Board on Dec. 10 issued a decision finding that the DM&E's application satisfied the transportation-related requirements for new rail line construction contained in the Interstate Commerce Commission Termination Act of 1995. However, the STB also said that a final decision on the DM&E's application would not be issued until after an environmental review process was completed.

The DM&E currently is classified as a Class II railroad and operates a 1,100-mile rail system located primarily in South Dakota and Minnesota. The STB application filed by DM&E involves its plans to construct a new 262.03-mile line from a point on its existing line near Wasta, S.D., westward to 11 specified mine sites in Wyoming. The DM&E also intends to build a new 13.31-mile line near Mankato, Minn., and a new 2.94-mile line near Owatona, Minn. to connect with I&M Rail Link. Likewise, the DM&E has said that it intends to rebuild and upgrade 598 miles of its existing line (which includes many grain and other agricultural rail users). The carrier projects that the total cost of the project would be approximately $1.4 billion.

The NGFA sent the following statement in support of the DM&E's application to STB Chairman Linda Morgan on Dec. 9:

"The National Grain and Feed Association (NGFA) urges the Surface Transportation Board to grant the Dakota, Minnesota & Eastern Railroad Corporation's application to upgrade its existing track system and expand into the Powder River Basin. The project is expected to enhance existing service to the DM&E's agricultural rail customers and has received support from NGFA's members served by DM&E.

"Importantly, the DM&E expansion project is consistent with NGFA's long-term support of actions which will enhance economic efficiency, productivity and competitiveness of all sectors of grain-based agriculture. Likewise, the DM&E's application appears to be consistent with the rail transportation policy set forth in federal law [49 U.S.C. § 10101] and will foster increased competition in the rail industry."

The STB's 60-page decision in STB Finance Docket No. 33407 can be accessed via the Internet at: http://www.stb.dot.gov.

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Clyburn Sworn in at STB

William Clyburn Jr. on Dec. 28 was sworn in as a member of the Surface Transportation Board. Clyburn, a South Carolina Democrat, began service on the STB through a recess appointment made by President Clinton on Dec. 18. The result is that the STB had two members when current STB Vice Chairman Gus Owen vacated his seat on Dec. 31. Clinton intends to resubmit Clyburn's nomination when the 106^th Congress convenes.

Previously, Clyburn was commerce counsel to Sen. Charles Robb, D-Va., where his primary responsibilities included advising on the policy implications of federal legislative initiatives involving transportation issues, such as railroad mergers, labor concerns and appropriations for intermodal facilities.

Prior to joining Robb's staff, Clyburn served as staff counsel to the Senate Commerce, Science and Transportation Committee from 1993-95. From 1992 to 1993, he was a law clerk to a judge in South Carolina. He is a graduate of the Georgia Institute of Technology and received his law degree from the University of South Carolina.

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Mark Your Calendars!

NGFA Sets Trading, Trade Rules and Dispute Resolution Seminar

…May 25-26 Kansas City Conclave Only Opportunity Until Year 2001…

The NGFA has scheduled another in its unique and highly acclaimed Seminars on Trading, Trade Rules and Dispute Resolution for May 25-26 in Kansas City, Mo., at the Westin Crown Center Hotel.

This biennial conference -- which will not be offered again until the year 2001 -- is specially designed for anyone involved in buying or selling grains, oilseeds, feed or grain products -- as well as for managers of those who do.

Case studies, panel discussions and a notebook of information presented at the conference (which includes all Arbitration Decisions issued since 1974, indexed by subject matter) adds to the lasting educational value of this seminar. Participants will be tested and receive a certificate attesting to their mastery of the course materials. Watch for registration materials in coming weeks!

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Tech Talk by Thomas C. O'Connor Director of Technical Services

Risk Management Plans Due June 21

Grain handling facilities with certain toxic chemicals, flammable gases or volatile liquids that exceed specified threshold quantities are reminded that June 21 is the deadline for developing and implementing a written risk management plan for the Environmental Protection Agency.

EPA's risk management program applies to any facility that manufactures, stores, distributes or handles one or more of several covered regulated substances in quantities exceeding the threshold level. Risk management plans are required for 77 acutely toxic chemicals and 63 flammable gases and volatile liquids that exceed threshold levels. The threshold quantities for toxic substances range from 500 to 20,000 pounds. For covered flammable and volatile materials, the threshold quantity is 10,000 pounds at any one time.

The regulated substances and threshold quantities most likely to be found at grain, feed and farm supply facilities are:

Importantly, the threshold level is the amount present at the site at any one time. For example, a facility with a propane tank with a 10,000-pound capacity would not be covered under the standard if it filled the tank to 8,000 pounds, even though it refilled it to that 8,000-pound level several times during the year. In addition, transportation activities are excluded from the requirement to have a risk management plan.

Requirements: Among other things, EPA requires those facilities that are covered by its risk management standard to: 1) perform an "off-site" consequence analysis that evaluates specific potential release scenarios for the regulated substance(s), including worst-case and alternative scenarios; 2) provide a five-year analysis of accidental releases of regulated substances from covered processes that resulted in on- or off-site deaths, injuries, evacuations, significant property damage or environmental damage; 3) develop an integrated prevention program designed to prevent the potential risk of a release of regulated substances; 4) develop an emergency response plan that is to be activated if an accidental release occurs; and 5) develop an overall management strategy for implementing the risk management plan.

EPA also requires that covered facilities review and update their risk management plans at least every five years, and more frequently if a new covered substance is present at the facility in levels exceeding the threshold level.

How to Comply: Under its risk management standard, EPA has developed three different compliance methods based upon the perceived risk of release of a controlled substance. Complete compliance guidance on this standard is contained in the NGFA's comprehensive publication entitled "Safety, Health and Environmental Compliance -- A Guide for Grain, Feed and Processing Facilities." This 400-plus-page notebook contains complete compliance strategies and programs for safety and health standards issued by the Occupational Safety and Health Administration, as well as EPA environmental standards, that apply to the grain, feed and processing industry. It is available for $150 each for members ($500 for non-members) by contacting Jackie Congress at the NGFA at (202) 289-0873.

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OSHA Revises Training Requirements for Powered Industrial Trucks

The Occupational Safety and Health Administration has issued a final rule that requires employers to "improve" initial training, as well as provide refresher training, every three years for operators of powered industrial trucks, such as operators of forklift trucks and front end loaders.

Under the final rule, issued Dec. 1, OSHA requires employers to provide both classroom-type training (such as video and computer training) and practical instruction (such as demonstrations performed by the trainer) in proper vehicle operation, the hazards of operating the vehicle in the workplace and the requirements of the OSHA standard for powered industrial trucks [29 CFR 1910.178]. The final rule permits employers to hire an outside consultant to provide the required training. However, the final rule requires that operator training and evaluation be conducted only by those who have "knowledge, training and experience to train powered industrial truck operators and evaluate their competence."

Initial Training: Before being allowed to operate a powered industrial truck, the OSHA standard requires the operator to successfully complete an initial training program that covers: 1) truck-related topics, such as operating instructions, truck controls, operating precautions, steering and maneuvering, vehicle capacity, and inspection and maintenance; and 2) workplace-related issues, such as surface conditions, stacking, pedestrian traffic, hazardous locations and areas with insufficient ventilation or other hazardous conditions. Topics not relevant to the employer's workplace need not be included in the training program.

Refresher Training: Refresher training is required whenever an operator is observed to operate the vehicle in an unsafe manner. Refresher training also is required if: 1) an evaluation reveals that the operator is not operating the truck safety; 2) is involved in an accident or near miss; 3) the conditions in the workplace change in a manner that could affect safe operation of the truck; or 4) every three years, whichever comes first.

Certification: The employer is required to certify in writing that an operator has received the required training, the date training occurred, the date the employee was evaluated; and the names of the trainers or evaluators.

Effective Dates: The OSHA final rule, which takes effect March 1, requires that employees hired before Dec. 1, 1999 be trained by Dec. 1, 1999. For those hired after Dec. 1, the OSHA rule requires that training occur before the employee operates a powered industrial truck.

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EDI Corner by Todd E. Kemp, Director of Marketing

Electronic Data Interchange -- Make It a New Year's Resolution!

As testing on two new NGFA EDI documents (invoice and settlement) nears completion, companies in the grain, feed and processing industry have an unparalleled opportunity to reduce their reliance on paper documents and move into the world of electronic commerce.

Testing of the new, enhanced NGFA EDI software is scheduled for completion in January, and orders are being accepted now.

The invoice and settlement documents are being added to the NGFA's original EDI software package, which contained a bill of lading and grade/weight certificate. With the new release, buyers and sellers of grains, oilseeds and grain products will have a more complete suite of applications to which EDI can be applied. With the new generation of EDI software, companies can receive from their inspection agency and forward to a buyer or seller grade/weight certificates; transmit bills of lading to their carriers (rail, truck and barge); and exchange invoice and settlement information with their trading partners. The NGFA's EDI program offers multiple applications in one affordable package, with customization for the grain, feed and processing industry found nowhere else.

What Value Can EDI Add to Your Business? As grain accounting software developers complete their EDI interfaces beginning in early 1999, one-time data entry will become a reality. This means that as EDI documents are created, other internal business applications (like inventory, accounts payable/receivable, etc.) automatically will be updated. EDI means fewer data entry errors, greater efficiency in use of human resources, linking together business relationships, and, of course, reducing the burden of paperwork that comes with each transaction. As the world and the grain, feed and processing industry move to adopt electronic commerce, the NGFA's EDI program provides a customized, off-the-shelf solution at extremely affordable prices.

How to Obtain More Information: For more information and to order your EDI software, contact Todd Kemp at (202) 289-0873, or e-mail your message to tkemp@ngfa.org.

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Trade Rules Committee Seeks Member Input on Grain Trade Rule 20

The NGFA Trade Rules Committee is seeking input from members on whether Grain Trade Rule 20 is obsolete and should be eliminated.

During its Jan. 10-11 meeting in Denver, the committee decided to seek input from the general membership before proceeding. The NGFA Trade Rules Committee will consider this and other trade rules changes during its open meeting at the NGFA's 103^rd annual convention, to be conducted on Saturday, March 20, from 4 to 6 p.m. at the Sheraton Palace Hotel in San Francisco. Convention registrants are welcome to attend.

Grain Trade Rule 20 addresses trades based upon "samples" provided by a seller to a buyer. The full text of the rule follows:

"NGFA Grain Trade Rule 20. Sample Grain: It shall be the duty of the Seller of grain by sample to furnish grain fully up to sample. The word "sample" used in this connection shall mean a portion of the shipment, or of the lot from which the shipment is to be made, and must represent the identical grain shipped or to be shipped. The words "type sample" shall mean a sample of like character but not necessarily identical in all respects with the grain shipped or to be shipped. Shipments rejected on account of quality shall be compared with the sale sample, by either the inspection committee, or some other duly authorized or agreed committee of the market in which such rejection is made, and the finding of said committee shall be final. Should the finding be in favor of the Buyer, the Buyer shall at once notify the Seller, by wire or by telephone, and it shall be the duty of the Seller to make satisfactory adjustment with the Buyer not later than 12 noon of the following business day. At the expiration of which time, if not adjusted, the shipment shall be subject to the order of the Seller and it shall be the duty of the Buyer to buy-in for the account of the Seller, cancel, or extend the defaulted contract and notify the Seller of his action. Should the Buyer and the Seller fail to arrive at a basis for adjustment that would enable the Buyer to handle such grain not up to sample, and should the said grain be finally rejected, it shall be the duty of the Seller promptly to reimburse the Buyer for the full amount of money advanced on such a shipment so rejected."

Submitting Input: If you have comments on this trade rule, please contact NGFA Counsel for Public Affairs David C. Barrett Jr. Comments may be submitted electronically to: dbarrett@ngfa.org. Comments supporting retention of the rule should include an example(s) of its current relevance.

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