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NE. STATE PATROL OPENS PRELIMINARY INVESTIGATION INTO SUSPICIOUS FAILURE TO PERFORM NOTICES NOTICES SPREAD TO SOUTH DAKOTA, ILLINOIS The Nebraska Grain and Feed Association (NGF) was notified this week that the Nebraska State Patrol is opening a preliminary investigation on the entities Ox Plow Farms and New Fashion Farms, which have been distributing notices to buyers in Iowa, Nebraska and perhaps elsewhere that they do not intend to deliver soybeans against existing contracts. The notice includes a reference to NGFA Grain Trade Rule 28, Failure to Perform. Ox Plow Farms lists its return address as the UPS store in Sioux City, IA. New Fashion Farms lists their return address as a UPS store in Omaha, NE. Meanwhile, this week another suspicious seller, JDBC Farms with a mailing address of a UPS store at 4089 South 84th Street Suite 164 Omaha NE 68127, has requested settlement from a South Dakota grain buyer stating that they would not be delivering grain and requested that the cash difference be mailed to them. The Minnesota Grain and Feed Association (MGFA) reported last week that several country elevators in various parts of that state received the same non performance notice from an entity called DCV Farms, LLC. DCV Farms mailing address is a Minneapolis UPS and FedEx drop boxes. The Grain and Feed Association of Illinois (GFAI) also reported a similar situation involving MLL Farms 311, listing an address at a UPS/FedEx drop-off store in Champaign. Based on the wide spread nature of this occurrence, the lack of ability to identify these entities or its principals and the questionable legality of the contract, NGF has advised members to take no action to honor this request without consulting legal counsel. Last week, NGF also requested that Attorney General Jon Bruning investigate New Fashion Farms, which handed the case to the State Patrol. Kevin Knorr is the state Patrol contact, and he can be reached at 402-471-8631. If a party enters into a contract with an elevator and has no intention of delivering grain, the contract would result in a probable violation of the Commodity Exchange Act and likely constitute a fraud on the buyer. When the market moves in the seller’s favor, an illegitimate trader will try to close out the contract and take the profits. When the market moves against the seller, however, an illegitimate trader will disappear and leave the loss in the hands of the elevator. We will keep you aware of any further developments in this case. If you have received any similar notices, or have any questions please contact Pat at 402-476-6174.
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