NGFA Board approves final set of new trucking-related trade rules

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On May 20, 2016, the NGFA Board of Directors voted to approve final a version of NGFA’s newest trading rules – related to the transportation of grain and feed products by truck.

The new truck-related additions amend NGFA Grain Trade Rule 12 to spell out the responsibilities of both buyers and sellers for grain transported by truck and sold based upon either destination or origin grades.  The newly adopted provisions also amend NGFA Feed Trade Rule 18 regarding truck shipments of feed products whose condition is guaranteed upon arrival at destination.

These new rules, which are designed to reflect current industry trade practice, were developed over the course of several years by a specially-assigned task force under the direction of the NGFA Board and the NGFA Trade Rules Committee.  In response to inquiries from an arbitration committee that had been involved in a case involving the delivery of allegedly contaminated grain by truck, NGFA’s Board and Trade Rules Committee first noted that the NGFA Trade Rules at the time provided significantly for other modes of transportation (rail and barge), but corollary rules for trucking largely were absent.  Input from the industry then was sought (including individuals with expertise and responsibility for NGFA-member companies specifically involving truck transportation) and in 2012, a broad specially-assigned task force was assembled for a closer review of the rules.

The task force then went through each of the rules. The initial scope was focused first on 26 sections of the Grain Trade Rules and Feed Trade Rules. Many were determined to be better left as-is.  So, in the end, the task force and full committee considered changes that affected seven of the Grain Trade Rules and three of the Feed Trade Rules.  Last year, the task force completed its initial review and both the Trade Rules Committee and Board of Directors voted to approve those initial recommendations, which then were ratified by the membership during NGFA’s annual business meeting in March 2016.

Based upon additional questions related to these rules that arose during NGFA’s annual convention in March 2016, NGFA committed to resuming the review process in a deliberate and expedited manner.  The previously-established task force was re-engaged and expanded.

The focus of the latest effort was on the provisions in the Grain and Feed Trade Rules that related to the obligations of contracting parties concerning testing and reporting of truck shipments, particularly at destination.  The concern that arose was that the latest provisions did not accommodate the wide range of possible scenarios to which the rules could be interpreted to apply.  After an extensive series of conference calls and exchanges of written materials, the task force on April 28 unanimously approved a set of amendments to submit to the full Trade Rules Committee for a vote.  Those amendments then were presented on April 29 to the full Trade Rules Committee for approval by electronic ballot.  All but two of the total 33 members of the committee cast their ballots on or before the established deadline.  Each ballot cast indicated “approval” of the proposed changes.

On May 9, the Executive Committee was asked to consider a proposal to request that the Board vote on the new amendments by electronic ballot.  This procedure is provided for under the NGFA Bylaws and was proposed to provide for the expedience desired and avoid the need for an in-person meeting of the Board to implement these changes.  By the established deadline of May 11, a clear majority of the Executive Committee had voted in favor of the proposal to make the request to the Board for an electronic vote.

The amendments then were submitted to the NGFA Board on May 12 for an electronic vote.  By the established deadline of May 20, a clear majority of the Board (50 of the 60 members) voted in favor of the amendments.  No votes against the amendments were cast.

NGFA appreciates the efforts and diligence in this process from the various NGFA committees and member company employees.  The following member companies had representatives on the task force and/or the Trade Rules Committee:  Livestock Nutrition Center; Commodity Specialists Company; Archer Daniels Midland Company; Trupointe Cooperative; CHS Inc.; MFA Inc.; Crossroads Cooperative; Bartlett Grain; APEX LLC; Parrish & Heimbecker; Purina Animal Nutrition; CGB; CPI; Stratford Grain; Central States Enterprises Inc.; Cargill, Inc.; Farmers Grain Terminal; POET Nutrition; Gavilon Grain LLC; Perdue AgriBusiness LLC; Foster Commodities; Harris-Crane Inc.; AgSpring Co.; Louis Dreyfus Commodities; Bunge North America Inc.; Jayhawker Consulting Co. LLC; Midwest Grain LLC; Zen-Noh Grain Corp.; FGDI LLC; Tate and Lyle Ingredients Americas Inc.; Ingram Barge Company; The Scoular Company; and The Andersons Inc.

Under the NGFA Bylaws, the final version of the newly revised rules goes into effect on June 19 – and will be subject to ratification by the membership at the upcoming business meeting. On June 19, these further amendments to the Trade Rules will be incorporated into the on-line version available publicly through the Trade Rules section of the NGFA website.  Shortly after that date, updated printed copies of the Trade Rules and Arbitration Rules also will be available by contacting the NGFA.