Farm Industry News Blog

Bankruptcy Court Upholds VeraSun's Right to Cancel Contracts

The National Corn Growers Association (NCGA), www.ncga.com, reported today that the U.S. Bankruptcy Court presiding over the VeraSun Energy Corporation Chapter 11 case will allow VeraSun to reject contracts that are economically disadvantageous to VeraSun, including contracts with corn growers.

Ron Litterer, NCGA chairman and a corn grower from Greene, IA, said that while it was doubtful that growers could influence the courts to require the ethanol company to pay the contracted price for their corn, he believed a NCGA-formed advisory committee did get growers' views and expertise heard by the court. The committee is made up of corn growers from Iowa, Michigan, Nebraska, North Dakota, Ohio and South Dakota.

"As providers of corn to VeraSun, corn growers want fair payment under fair terms for their corn, as well as a positive conclusion that allows VeraSun to stay viable as a long-term customer for our corn," Litterer said.

Litterer said financial challenges for other large corn customers, such as the bankruptcy filing recently announced by Pilgrim's Pride Corporation, may create a ripple effect for corn growers. "NCGA will continue to monitor these situations and play a helpful role whenever possible," Litterer said.

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