126.19 Grain dealers; deferred payment contracts.

(1) Contract in writing. A grain dealer may not procure grain from any grain producer or producer agent under a deferred payment contract before the contract is reduced to writing and signed by the parties. The grain dealer shall provide a copy of the signed contract to the other party.

(2) Contents of contract. A grain dealer may not enter into a deferred payment contract unless the deferred payment contract includes all of the following:

(a) A unique contract identification number.

(b) The type, weight, grade, and quality of grain procured and a statement that price adjustments may apply if delivered grain varies in grade or quality from that identified in the contract.

(c) The price for the grain or, in a deferred price contract, the method and deadline by which the price will be determined.

(d) The date by which the grain dealer agrees to make full payment for the grain, which may not be more than 180 days after the date on which the contract price is established or more than 180 days after the date on which the grain dealer takes custody or control of the grain, whichever is later.

(dm) If the contract is a deferred price contract, a pricing deadline that is not more than one year after the date on which the grain dealer takes custody or control of the grain.

(e) The grain dealer's permanent business location.

(f) Other information required under this section.

(3) Payment and pricing deadlines.

(a) A grain dealer shall make full payment under a deferred payment contract by the deadline date specified in the contract.

(b) The parties may not extend a payment or pricing deadline under sub. (2) (d) or (dm), except that they may sign a new contract that extends either deadline or both deadlines for up to 180 days if the new contract refers to the contract number of the original contract.

(4) Required notice.

(a) A grain dealer may not enter into a deferred payment contract with a grain producer or producer agent unless the deferred payment contract includes the following statement in clear and conspicuous print immediately above the contract signature line: “This is not a storage contract. The grain dealer (buyer) becomes the owner of any grain that the producer or producer agent (seller) delivers to the grain dealer under this contract. The producer or producer agent relinquishes ownership and control of the grain, and may become an unsecured creditor pending payment."

(b) A grain dealer may not enter into a deferred payment contract under which a grain producer or producer agent agrees to receive payment for grain more than 120 days after delivering the grain to the grain dealer unless the deferred payment contract clearly and conspicuously discloses that if the grain dealer defaults on payment under the deferred payment contract, any claim filed by the producer or producer agent with the department under s. 126.70 will be disallowed. The department may by rule or order specify the form and content of the disclosure.

(5) Deferred payment contract assessment. From the amount that a grain dealer pays to a grain producer or producer agent under a deferred payment contract, the grain dealer shall deduct a deferred payment contract assessment. The assessment shall equal the total amount owed under the contract before the assessment is deducted, multiplied by the deferred payment assessment rate that applies under s. 126.15 (6) when the contract is made. The grain dealer shall disclose the assessment amount or, if the contract is a deferred price contract, the method by which the assessment amount will be determined, in the written contract under sub. (1).

History: 2001 a. 16; 2009 a. 296.