- Corn Producers – Farmers and Landlords Leasing Their Farmland Who Lost Money from the Drop in Corn Prices
- Non-Producers – Grain Elevators and Corn Exporters Who Lost Money from the Drop in Corn Prices
Both Can Claim Lost Income from the Drop in Corn Prices
- Other Damages may include Storage Costs, Clean-Up Costs and Transport Costs
Thousands of individual farmers, landlords, grain elevators and corn exporters have filed suit against Syngenta, alleging that its actions caused the drop in corn prices and the consequent collective losses of billions of dollars. Who can join this lawsuit against Syngenta? In sum, the answer is anyone directly affected by the drop in corn prices that Syngenta caused.
First, farmers who produce corn sustained obvious damages in the form of reduced income when the price they received for the corn they produced dropped precipitously in 2013 and 2014. Claims are being made by such farmers for Syngenta’ role in the drop in corn prices from $7.00/bushel in June, 2013 to $3.25/bushel in June, 2014. Syngenta’s actions were one of the precipitating causes of this drop.
Second, landowners who lease their land to farmers have sustained damages as well. Specifically, a landlord leasing his or her farmland to a farmer in exchange for a percentage of the crop has been damaged in the same manner as the farmer they leased to. While a landlord being paid a straight cash rent is not injured if the farmer succeeded in paying the rent owed even with falling corn prices, oftentimes those same farmers seek a reduction in cash rent during the next crop year. If the rents paid then dropped because of a falling corn price caused by Syngenta’s conduct, the landlord has a claim for this lost rental income.
Third, grain elevator companies have claims in two instances. Initially, many grain elevators have seen their profit margins on bushels handled drop dramatically as a result of the disruption to the corn export market. Furthermore, other grain elevators that buy corn on futures contracts – so called “hedge” contracts – have directly lost money when they contractually obligated themselves to pay farmers a set price for all corn produced and were therefore forced to pay that set price even when the resale price for that corn fell below the price they paid for it.
Fourth, corn exporters have lost money by virtue of contractually obligating themselves to pay grain elevators for their corn at a predetermined price, and then being forced to continue to do so even when their ability to re-sell that corn at a higher price disappeared. Exporters such as Cargill, Trans Coastal Supply Company and Archer Daniels Midland have all filed lawsuits against Syngenta for their damages.
Typically, ethanol plants have not sustained damages from the drop in the price of corn, because this has resulted in a drop in their cost of supply. However, in limited circumstances, ethanol plants contractually obligate themselves to pay for corn at a predetermined price. When the market price of corn fell well below that predetermined hedge price, ethanol plants lost money in that instance.
In addition to economic losses attributed directly to the drop in corn prices, some farmers have sustained additional damages in the form of storage costs when they have held their corn in an effort to wait on prices rising again. Moreover, farmers that planted Syngenta’s genetically modified traits (known as MIR-162 (Viptera Agrisure) or Duracade Agrisure) have sustained additional damages in the form of the cost of cleaning up storage bins, harvesting equipment and transport vehicles, as well as the extra transport costs necessitated when corn grown was rejected by nearby grain elevators, and farmers were forced to haul it long distances for eventual sale.
Mikal C. Watts
WATTS GUERRA, LLP
Four Dominion Drive, Bldg. Three, Suite 100
San Antonio, Texas 78257
* This information is provided to supply relevant information concerning the GMO corn lawsuit, and should not be received as legal advice. Legal advice is only given to persons or entities with whom Watts Guerra LLP has established an attorney-client relationship. If you have another lawyer in the GMO Corn lawsuit, you should consult with your own attorney, and rely upon his or her advice, rather than the information contained herein.