An article in the Financial Post by John Greenwood, clearly shows why and how the problems of the current Credit debacle is curtailing grain trade and how it has contributed directly to where Ontario’s Dry Bean Market finds itself. No “Posted Price” – consequently risk of ownership and potential lack of cash flow is starting to impact some producers.
The article contains quotes such as “The problem is not demand, and it’s not supply … It’s finding anyone who can come up with the financing to buy.” “Access to credit is key…”. In an atmosphere of ‘drying up credit’, the last thing on nervous bankers’ minds is making fresh loans.
So the Ontario/Canadian dry bean market that relies heavily on the overseas export markets is caught in the same maelstrom of “…we can’t pay you until our customer pays us (or comes up with a bid price).
Who then bears the financial risk and the cost? Today, for Beans, it is the primary producer.