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Asssociation News - Summer 2006
Attendance Tops 200 for NGFA Seminar on Trading, Trade Rules and Dispute Resolution

WASHINGTON – As of May 1, A record number of more than 200 grain and feed merchants and other industry members already are registered for the National Grain and Feed Association’s (NGFA) Trading, Trade Rules and Dispute Resolution Seminar, scheduled for May 9-10 at the Kansas City Airport Marriott Hotel, Kansas City, Mo.

NGFA Trade Rules Committee Chairman James W. Keistler said the every-other-year seminar, which won’t be offered again until 2008, is particularly timely given the increasing number and monetary value of trade disputes being submitted for resolution through the NGFA’s arbitration system. “The types of issues in dispute run the gamut of what can go wrong in grain- or feed-related transactions,” said Keistler, merchandising manager for Twomey Co., Smithshire, Ill. “And there are real dollars at stake, with damage claims in some cases reaching as high as $1.7 million.”

The seminar provides unique information on grain contracting principles, the application of the NGFA’s Trade Rules to commercial and farmer-customer contracts, and the use of arbitration to resolve trade disputes involving grain, feed and feed ingredients, as well as certain classes of rail disputes with carriers. The seminar is designed particularly for merchandisers with responsibility for buying and selling grains, oilseeds, feed ingredients and grain byproducts.

“This seminar is an essential training resource for newly hired employees or those who recently have been assigned responsibilities for trading grains, feed and feed ingredients,” Keistler said. “But it’s also an excellent opportunity for more seasoned merchandisers to brush up on ways to avoid trade disputes by writing thorough contracts and properly applying the trade rules and current trade practices to everyday trading activities.”

NGFA Counsel for Public Affairs Charles Delacruz noted that at the start of 2006, there were 52 active cases awaiting resolution within the NGFA’s arbitration system. Of those, more than 20 involved contractual disputes between commercial grain buyers and farmer-customers, while at least another 10 cases involved issues specifically related to feed and feed ingredients. Meanwhile, seven cases involved rail-related disputes, said Delacruz, who as the NGFA’s corporate secretary administers the arbitration system.

The seminar will provide practical information on the application of the NGFA’s Trade Rules and business law to the everyday trading of grains, feed and feed ingredients, and other grain products. Case studies will provide “real-world” examples of some of the most common errors that can trigger disputes.

Among specific topics to be addressed are:

• The nature, structure and application of the NGFA’s trade rules to grain, feed and feed ingredient contracts between commercial firms, as well as between commercial firms and farmer-customers.

• The basic principles involved in trading, producer contracting law and the Uniform Commercial Code.

• Contracting issues pertinent to cash versus forward contracts, biotechnology-enhanced commodities, and grain and feed quality and safety issues, including mycotoxins.

• A review of how the NGFA’s unique arbitration system operates, with a special focus on contracting pitfalls that can determine whether a dispute is resolved through arbitration or court litigation.

• A thorough review of key governmental, political and commercial developments affecting U.S.-Mexico cross-border trade in grains and grain products.

In addition, this year’s seminar program will feature “special-focus” sessions on:

• The Food and Drug Administration’s bioterrorism recordkeeping regulations, which are scheduled to take effect on June 9 for companies with 11 to 499 employees, and on Dec. 11 for companies with 10 or fewer employees. The regulations already are in effect for companies with 500 or more employees. Each seminar registration will receive a copy of a new comprehensive, 52-page NGFA guidance document on complying with FDA’s bioterrorism recordkeeping regulations.

• The importance of appropriate sampling procedures, as well as the types of testing methods available, for detecting various mycotoxins in grains and grain products. The seminar also will include information on provisions to consider including in purchase contracts to ensure the quality of grains and feed ingredients being contracted is appropriate for the product’s intended use.

• Whether the NGFA should develop trade rules to facilitate the trading of distillers grains, an issue important to ethanol manufacturers, co-product marketers and feed manufacturers.
The seminar faculty consists of top industry experts knowledgeable about grain, feed and transportation contracting, law, the application of the Uniform Commercial Code and other seminar topics.

Each participant will receive a notebook with a CD containing seminar presentations, as well as printed background materials pertaining to the topics addressed. Included is a section containing all NGFA Arbitration Decisions rendered since 1974 – fully indexed by subject matter. Participants successfully completing the seminar examination also will receive a certificate attesting to their mastery of the materials.

Novel Materials Meetings Held
By Richard Sellers

Several AFIA members attended a Pre-Ingredient Meeting at AFIA March 29 in advance of the March 30th Novel Materials Industry/FDA Workshop in Arlington, VA. The purpose of both meetings was to review the issue of “novel materials,” which are those materials added to feed that do not appear to be feed ingredients in the classical sense. AFIA’s members also discussed the significant decrease in ingredient reviews by FDA’s Center for Veterinary Medicine (CVM).

At the AFIA meeting, members discussed several options regarding this continuing decline in reviews. CVM officials have indicated two clear reasons for the decline—the first being insufficient resources, including staff. Secondly, an official said was the reduction in the quality of the data submissions. AFIA members have complained of “moving targets” in the review process which likely result in these review declines.

Members also discussed the option of supporting FDA’s efforts to finalize the generally recognized as safe (GRAS) notification system that was proposed in 1997. This system proposed by FDA’s Center for Food Safety and Applied Nutrition (CFSAN) would allow firms to submit “notices” instead of “petitions,” thereby allowing a quicker review and forcing FDA to evaluate the submission more quickly before the firm could market the product.

Under the proposed rule, CFSAN has allowed the listing of over 130 “notices,” but CVM has stated it will not do so until the final rule is published. If this occurs, before the year’s end, as some in FDA are predicting, the staffing shortfalls at CVM’s Division of Animal Feeds could cause a further review crisis by denying these “notice” submissions. AFIA is examining how to encourage CVM to support the GRAS Notification process and how to obtain the needed resources for reviews.

The March 30th meeting heard CVM provide the “roadmap” for the ingredient approval process. Clearly, some members were concerned about the large number of ingredients in the marketplace that do not have AAFCO or FDA approval. A common theme expressed at the meeting is the need to provide a level playing field in the marketplace.

CVM announced it expects to issue a Compliance Policy Guide (CPG) before the year’s end to address the dual novel materials chondroitin sulfate and glucosamine, both commonly used in non-food animals. CPGs are guidance documents FDA issues to its field staff to provide compliance and enforcement expectations. It is widely believed that the materials will be a low regulatory priority if used in non-food animals and at safe levels. CVM typically prioritizes its enforcement resources to pursue those firms promoting ingredients that either make clear animal drug claims without approval (i.e. cure, treat, prevent or mitigate a disease) or are unknown ingredients for which there may be a safety concern.

AFIA is reviewing the member input and developing a coordinating plan to address the agency resource insufficiencies, quality issues, and GRAS Notification final rule. A similar theme in these meetings was the ability to make structure/function label claims for formulations and ingredients. These issues have been given new life at CVM with the appointment of a new FDA chief counsel and acting commissioner.

For a copy of the AFIA “white paper” discussing the issues at the pre-ingredient meeting, please contact AFIA VP Richard Sellers at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

GEAPS Honors 32 Companies For Outstanding Safety Performance

GEAPS honored 32 companies at Exchange 2006 for their outstanding safety records last year. The companies, representing 422 separate grain facilities, recorded approximately 12.1 million employee hours without a work-related lost-time injury or illness during 2005. The total number of hours is a record for the safety program.

Mark Daniels, chairman of the joint GEAPS-NGFA Joint Committee on Safety, Health & Environmental Quality, praised the participants for their skill and dedication to safety. Daniels presided over the Exchange Safety Awards presentation, held in Nashville on February 28.
The full list of award winners can be seen on the GEAPS website at http://www.geaps.com/news_detail.cfm?&id=604&action=View&startrow=1.

GEAPS also honored companies and facilities with extended records of achievement in safety. One of the awards went to the top five facilities, measured through the years in terms of cumulative hours without a lost-time injury or illness. Winners honored at the Exchange were:

1. The Andersons’ facility in Champaign, Illinois

2. Cargill Grain & Oilseeds’ export facility in Houston, Texas

3. Cargill AgHorizon’s facility in Sarnia, Ontario

4. Riceland Foods’ facility in Wheatley, Arkansas

5. Zen-Noh Grain Corp.’s facility in Convent, Louisiana

GEAPS also honored the five facilities that have received a GEAPS safety award for the greatest number of consecutive years:

1. Bunge North America’s facility in Desoto Landing, Arkansas, 27 years

2. Bunge North America’s facility in Fountain Bluff, Illinois, 23 years

3. Cargill’s facility in Tipton, Indiana, 20 years

4. (tie, 19 years each)

Bunge North America’s facility in LaGrange, Missouri

Bunge North America’s facility in Yazoo City, Mississippi

The Bunge facility in Hickman, Kentucky

The Bunge facility in Huffman, Arkansas

5. Bunge North America’s facility in Poplar Bluff, Missouri

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