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Petitioners could meet their production and delivery obligations
with corn that was grown on their farm, that they acquired
elsewhere, or that MCP already held in its option pool.6 “Option
pool corn” is corn maintained by MCP and made available for sale
only to MCP members for use in meeting their production and
delivery obligations under the UMAs. A member who wished to
satisfy his production and delivery obligation using option pool
corn completed a form to that effect and paid an acquisition fee
of 5 cents per bushel of option pool corn purchased. If either
petitioner failed to meet the production and delivery obligations
under the UMA, the UMA authorized MCP to act as that petitioner’s
agent in acquiring corn, charging all related expenses to Mr. Bot
or Mrs. Bot, as appropriate.
In 1994 and 1995, petitioners met their production and
delivery obligations under their UMAs with option pool corn. In
1994 and 1995, petitioners paid acquisition fees of $18,070 and
$16,431, respectively, for the option pool corn used to satisfy
their combined production and delivery obligations.
MCP was obligated, pursuant to the UMAs, to process the corn
produced by its members each year as dictated by the market and
in a manner MCP deemed in the best interest of the cooperative
6Regardless of how petitioners acquired the corn they
delivered to MCP, petitioners warranted to MCP that they were the
producers or owners of the corn they delivered to MCP under the
UMAs.
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Last modified: May 25, 2011