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Input Capital Corp. Comments on Flooding in Saskatchewan
V.INP | 1 day ago

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."


Read more at http://www.stockhouse.com/news/press-releases/2014/07/09/input-capital-corp-comments-on-flooding-in-saskatchewan#MKcLLUP1VRIQfbem.99