THE GRAINS industry is urging farmers with unpaid debts from failed grain business Lempriere Grain to get in contact with the administrators Jirsch Sutherland to register their debts.
A swiftly evolving crisis involving the Victorian-based agribusiness saw it placed into administration last Friday, with farmers across Victoria and southern NSW owed substantial sums of money.
A creditors meeting will be held in Melbourne on April 2 to discuss whether to appoint a committee of inspection and lodge any proof of debts.
No official figures regarding the extent of losses has been issued, however, farming groups are expecting there will be hundreds of farmer creditors.
Unofficial estimates for the total debts owed range as high as $10 million.
The industry is scratching its head on how to better prepare growers for incidents such as the Lempriere Grain collapse.
All involved have said there were no warning signals or red flags to indicate the business was in financial trouble.
"We have worked really hard as an industry over the past few years to make growers aware of counterparty risk and what they can do to minimise their exposure," said Grain Producers Australia chairman Andrew Weidemann.
"There are red flags, such as slow payment, you can run credit checks, things that can give you a clue a business is struggling but in this case there was nothing," he said.
Mr Weidemann said the high prices on offer this season meant it did not take a lot of grain for the farmers to be owed significant sums of money.
"You do two B-Doubles of wheat, 100 tonnes or so, which you could do in a day quite easily and there's $40,000 at $400/t."
He said the increased focus on counterparty risk may have limited the extent of the damage.
"There has been a real move towards tighter payment terms in recent years and perhaps that has helped in this case it may have stopped more grain being delivered to the company.
In terms of the creditors there are a mixture of growers who have dealt directly with Lempriere and those who have sold grain to the company via a broker.
Some brokers are also creditors due to freight deals.
It is a gloomy outlook for those owed money based on the precedent from other failed grain companies.
Andrew Whitelaw, Mercado analyst, said an analysis of other grain buyer insolvencies in recent years showed unsecured creditors had generally reeived payments totalling 10 cents in the dollar or less.
The Victorian Farmers Federation (VFF) said growers first started contacting them earlier in the month after a number of warning signals emerged, such as late payment, then the failure to answer phone calls, then the removal of the websites of both Lempriere Grain and Starcom Resources, which owns a 50 per cent stake in Lempriere Grain.
Lempriere Grain had offices in both Melbourne and Ballarat, while Starcom Resources was based in Singapore.
Fairfax Agricultural Media has been unable to reach any sources from either company for comment.