At The Podium
Legal Assessment of Ag Production Risk
Agriculture producers face a myriad of well-recognized risks – operational, production, price/market, institutional, and financial, just to name the five most common to the agriculture industry. But what about the less common, often-overlooked counterparty risk factor? How do you effectively deal with the possibility that another party to a transaction may not honor their obligations, go bankrupt, or even defraud you? While the Eastern Livestock Company debacle is a glaring example of counterparty risk, numerous other examples remain: What if the elevator company holding your grain goes under and you don’t have a warehouse receipt? What if the farmer you contracted with to deliver your winter hay sells to someone else when hay prices skyrocket? Or what if a drought causes your ranch-tenant to sell all of his livestock and default on your lease?
In his presentation titled “Legal Assessment of Ag Production Risk,” McAfee & Taft attorney Jeff Todd addresses the various types of risks facing agriculture producers, discusses the various methods and strategies for managing these risks, and provides a detailed look into how the state of Oklahoma responded to the Eastern Livestock Company scandal by enacting legislation that protects agriculture producers by ensuring they maintain a security interest in their livestock until payment is fully secured.
Todd is the co-leader of McAfee & Taft’s Ag & Equine Industry Group and was instrumental in assisting Oklahoma lawmakers in drafting the Livestock Owner’s Lien Act of 2011.