Article in local newspaper...
Bankruptcy may hurt seed farmers
AgriBioTech announces plan to file for Chapter 11 reorganization
By Dusty Parnell - Idaho Press-Tribune
HENDERSON, NEV. ? Many local seed farmers wonder today if they will get paid for last year?s crop.
The parent company of three local seed companies, AgriBioTech, declared on Monday its intention to file for a Chapter 11 bankruptcy restructuring later this week.
The company was unable to obtain a new financing package, which was to take place in December. The company was $77 million in debt last September.
Under Chapter 11, AgriBioTech may remain in operation and in possession and control of it?s property. The proceeding provides the company with temporary relief from its debts while it devises a plan to restructure those debts.
Alfalfa seed is one of the top cash crops in Canyon County. There are about 42,000 acres of alfalfa seed and 6,500 acres of clover seed grown in southwest Idaho. In Canyon County, about 80 operators and 40 landowners are involved in the seed business.
Mike Nichols, chairman of the Alfalfa Seed Commission, estimates that as many as 40 percent of area growers are associated with one of AgriBioTech?s three local companies ? Allied Seed and Clark Seeds in Nampa and W-D Seed Growers in Homedale.
?It could even be higher (than 40 percent),? Nichols said. ?That?s a big deal.?
A rough estimate of alfalfa and clover seeds in southwest Idaho shows a value of more than $34 million. ?This is a big mess. It couldn?t come at a worse time.?
Most seed crops have been delivered, but only a few producers have received partial payments, according to local growers. Bankruptcy could put all those payments in jeopardy.
?That?s going to take a ton of money out of this valley,? Bill Crookham of Crookham Seed Co. said. The Crookham Seed Co. is not one of AgrBioTech?s companies. ?Our commodity prices are very low and those guys are not going to get paid for last year?s crop.?
In a company statement on Monday, ABT Chief Executive Officer Richard Budd blamed an oversupply of seed, low prices in a weak agriculture economy and business problems in organizing 34 companies into a single operation.
AgriBioTech is also involved in a class action lawsuit for security fraud. Company officials were unavailable for comment Monday. |
