REGINA, July 9, 2014 /CNW/ - Input Capital Corp. ("Input") (TSX Venture Exchange: INP) commented today on media reports of flooding in Saskatchewan and the potential impact on its canola streams.
While the impact of flooding in SE Saskatchewan has had a severe impact on many towns and the roads that connect them, it is too early to know with certainty about the impact of the flooding on the farm partners of Input. Input President and CEO Doug Emsley made the following points:
- Input pursues a deliberate strategy of geographic diversification across all three Prairie provinces. Some of our farmers are in the affected areas, but most are not.
- Input requires every farmer to be a participant in crop insurance, which guarantees a farmer 70% of his long term production average. Crop insurance is designed to keep farmers farming, so it is a very good counterparty risk reduction tool for Input. Flooded fields will trigger crop insurance payments to farmers.
- As part of the risk management in Input's underwriting of a farmer, Input's expected canola tonnage represents about 50% of the farmer's long term production average for canola, and often less. This is well below the yield guarantee the farmer has from crop insurance.
- A decline in overall Prairie canola production tends usually leads to increased canola prices and/or narrower basis, which add to Input's revenue on every tonne of canola received from unaffected farmers.
- We believe that Input can play a role in assisting affected farmers by signing them up to new streaming contracts. A streaming contract is much more flexible than bank financing or trade credit.
Emsley went on to say: "Many of our farm partners and their families have been farming for generations, through drought and flooding and grasshopper invasions and the Dirty Thirties. They are resilient. Our intention is to build Input into just as resilient a company, so that Input is also around for decades to come."
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Input is an agriculture commodity streaming company with a focus on canola, the largest and most profitable crop in Canadian agriculture. Input enters into multi-year canola streaming contracts with canola farmers in western Canada. Pursuant to the streaming contract, Input purchases a fixed portion of the canola produced, at a fixed price, for the duration of the term of the contract. Input is a non-operating farming company with a portfolio of twenty-one canola streams, all of which produce canola and revenue for Input within a year of the agreement being signed. Input plans to grow and diversify its low cost canola production profile through entering into additional canola streaming contracts with farmers across western Canada.
Input is focused on farmers with quality production profiles, excellent upside yield potential, and strong management teams. Input has completed canola streaming contracts in Northern Alberta, Western Saskatchewan and throughout East Central Saskatchewan.
Forward Looking Statements
This release includes forward-looking statements regarding Input and its business. Such statements are based on the current expectations and views of future events of Input's management. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting Input, including risks regarding the agricultural industry, economic factors and the equity markets generally and many other factors beyond the control of Input. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Input undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
SOURCE: Input Capital Corp.