18 June, 2008 – Cargill Inc has declared force majeure on some corn syrup contracts after its corn milling plant at Cedar Rapids, Iowa, has shut down because of flooding in the area.
The company said the closure is temporary but unavoidable following the severe floods that have hit Cedar Rapids in the last few days.
A Cargill statement said: “This means that Cargill will not be able to meet all of its customers' contracted volumes, and supply of corn syrup from Cargill will be limited until further notice.”
The company said the floods had not hit its high corn fructose syrup (HCFS) production. Therefore the force majeure did not extend to its contracts for HCFS as production remained unaffected by the outage at Cedar Rapids.
Force majeure clauses can be invoked by companies when they are affected by situations beyond their control, such as fires or natural disasters. The measure exempts firms from meeting contractual obligations.