REYNOLDSBURG, Ohio – The Ohio Department of Agriculture has determined that Bobb Bros. Inc. of Leesburg, Ohio, in Highland County owed farmers about $2.6 million when its agricultural commodity handler’s license was suspended by the department July 23.
This insolvency is expected to result in the largest-ever payment to eligible grain depositors from the Ohio Grain Indemnity Fund since it was established in 1983 to protect farmers from grain elevator failures.
Taking control. The Highland County Common Pleas Court appointed a retired grain elevator manager Cliff Byers as grain receiver to take control of the company and liquidate its assets, while state officials help verify and process claims by depositors seeking to recoup losses.
Farmers with obligations from Bobb Bros. Inc. are asked to report their losses to the department’s Grain Warehouse Section at 614-728-6410.
What to do. “ODA officials will be at the facility when the receiver takes control to discuss concerns with farmers regarding grain delivery receipts and to hand out claim forms to expedite the process,” Ohio Agriculture Director Fred Dailey said.
“It is important for farmers submitting claims to document their losses with scale tickets and other proof of grain ownership and transactions with Bobb Bros. Inc.
“This will enable the Commodity Advisory Commission to validate the claims as quickly as possible and help eligible depositors recoup as much of their losses as possible.”
The agriculture department continues to investigate Bobb Bros. Inc. to determine the reason for the insolvency.
Uncovered. A nine-day examination by the department has uncovered missing records and revealed that:
* Bobb Bros. Inc. was short of the amount needed to cover its storage obligations to farmers by 56,070 bushels of corn, 82,187 bushels of soybeans, and 97,480 bushels of wheat.
The monetary value of this grain totaled $887,098 at the time of the examination. The grain on inventory will be returned to warehouse receipt holders. There is no grain inventory to cover other types of deposits, such as delayed price contracts.
* More than 200 farmers are due payment by the company for 280 grain deposits at the facility.
* The company had unpaid delayed price contracts and payables amounting to $1.7 million.
Typical practices. Grain elevators across Ohio typically store grain for months at a time before it is sold and delivered to a terminal grain elevator.
It is common for farmers to deliver harvested grain to a grain elevator, collect a delivery receipt, and receive payment for their crops at a later date.
A grain elevator becomes insolvent when it does not have funds or other assets to cover payments due to farmers who have deposited grain at the elevator or to other creditors.
The department’s Grain Warehouse Section administers the indemnity fund, which reimburses eligible farmers when a licensed elevator becomes insolvent.
Numbers. Since it was established in 1983, the fund has reimbursed farmers more than $4.1 million in a number of smaller elevator insolvencies.
It is funded through a half-cent per bushel assessment on grain marketed at licensed elevators in Ohio, collected from July 1983 through December 1985.
Typically, the assessment is collected when the fund drops below $4 million. The fund now stands at approximately $6.7 million.