- 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 Syngenta’s actions caused the drop in corn prices and, consequently, billions of dollars in losses by the U.S. corn industry. In sum, anyone directly affected by the drop in corn prices can join the GMO corn lawsuit against Syngenta.
Corn Farmers
Corn farmers sustained obvious damages in the form of reduced income when the price they received for corn dropped precipitously from $7.00/bushel in 2013 to $3.25/bushel in 2014. Syngenta’s actions were a major cause of this price drop.
In addition to economic losses attributed directly to the drop in corn prices, some farmers sustained additional damages in the form of storage costs, when they chose to store their corn to wait for prices to rise again.
Farmers that planted Syngenta’s MIR 162 corn seed (Viptera or Duracade) have sustained additional damages, including the cost of cleaning up storage bins, harvesting equipment, and transport vehicles, and the cost of transporting corn after it was rejected by nearby grain elevators.
Landowners
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.
A landlord being paid a straight cash rent was not injured if the farmer succeeded in paying the rent owed. But, in light of falling corn prices, if the farmer sought and obtained a reduction in cash rent for the next year, the landlord has a claim for this lost rental income.
Grain Elevators
Grain elevator companies have claims in two instances. Initially, many grain elevators saw their profit margins on bushels handled drop dramatically as a result of the disruption to the corn export market. Furthermore, grain elevators that buy corn on futures contracts – so called “hedge” contracts – directly lost money when they contractually obligated themselves to pay farmers a set price for all corn produced and were forced to pay that set price, even when the resale price for corn fell below the price they paid for it.
Corn Exporters
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 pay that price, 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.
Ethanol Plants
Most ethanol plants have not sustained damages from the drop in corn prices because it caused 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 and have a claim for those damages.
Written by:
Mikal C. Watts
Watts Guerra LLP
4 Dominion Drive, Bldg. 3, Suite 100
San Antonio, Texas 78257
Phone (210) 447-0500
Email mcwatts@guerrallp.com
*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.
© Watts Guerra LLP 2015
