Check out these deals to finance seed and chemical buys.

With Christmas only days away, most shoppers are buying packages to put under their trees. But Ron McCartney has a different kind of package on his mind. The Clayton County, IA, farmer is evaluating his seed and chemical programs for next spring and considering how he'll finance them. By early January, he'll make his final input decisions.

Last year, he chose to lock into a new program from Pioneer called the TruChoice Opportunity Program. It offered the hybrids he wanted, herbicides he thought would handle his weeds and financing he believed met his farming needs and objectives.

"Financing was an important part of the total equation," he says. "Based on sheer economics, it was a real help to us."

As farmers like McCartney look for stepping-stones to a future with better commodity prices, many are turning to company-sponsored financing programs in an effort to reduce total input costs and/or delay payments. Most of the major seed and chemical suppliers offer such programs, and smaller companies are weighing in, too.

Many cash-strapped growers appreciate such programs; others aren't so sure and wonder about the impact they have on their input-buying decisions. Regardless, financing programs are here to stay, and more are on the way. Here are a few to consider.

Ask yourself this Howard Doster, agricultural economist, extension farm management, Purdue University, says there are several important questions that farmers need to ask themselves before they purchase seed and chemical products that are offered in conjunction with each other, and are financed to boot, by one company. "Are you better off when products are bundled?" Doster asks. "Are you getting the products you need, and do you get close to the real market price?"

Jason Zimmer thinks so. As a Pioneer seed dealer, Zimmer acknowledges he's biased toward the company's seed products and believes its financing programs are second to none. The Chippewa County, MN, farmer adds that he doesn't feel constrained by the number of grass and broadleaf herbicides offered through the company program, either, which emphasizes Dupont chemistry along with a smattering of herbicides from other companies. "There are plenty of good weed-control choices available to me," Zimmer says. In regard to financing, he adds: "If I can purchase my seed this December, at 6% interest, and the company will carry me until December 1, 2001, then there's no way I'm going to the bank. Banks here are charging almost 10%."

The best financing scenario available through the TruChoice program is prime rate minus 3 1/2%, depending upon the makeup of farmers' total seed and herbicide purchases. Another option is the deferred payment program for those growers buying Pioneer seed alone. Its best rate is prime minus 2 1/2%. Corresponding to these two programs are premium product options, quantity saving options, early pay savings, replant and weather-related seed exchange flexibility and plant calibration services, and premium contracting opportunities. For more information, contact Pioneer Hi-Bred International, Dept. FIN, 400 Locust St., Suite 800, Des Moines, IA 50306, 515/270-4200, www.pioneer. com/choices.

Evaluate the options McCartney says he's considering using his 2000 program again in 2001. However, other companies that offer attractive financing arrangements are courting him. "We're in the Wal-Mart of farming era out here, and we've got to keep tightening the lid on costs," McCartney says. "I do value my relationships, but with $1.50 corn, I have to consider other options as well."

Rich Fleisher says farmers need to evaluate their options to determine the right one for them. The Knox County, IL, corn and soybean producer says his experience is that the financing options available through traditional means often are competitive with company offers. He says that, with careful examination, growers can make comparisons, draw informed conclusions about the value of the various financing options and determine whether they are getting the best price for inputs. "I could see some suppliers providing good rates, but then hiding costs in the cost of the product," he says.

Fleisher also believes that, with a little chutzpah, farmers can lower the total price they pay for inputs. His advice: "Force yourself to be a competitive buyer, and ask for the best rate. It can be a lot like buying a car," he says. "There's usually room for dickering involved."

However, Fleisher wonders whether a straighter two-tier pricing system is occurring in the marketplace, given the current farm economy and farmers' increased use of the Internet. If so, that may help those farmers intent on securing bottom-dollar prices. He says, "I believe those farmers should ask their supplier, What price can I get for these products if I don't need your services, and if I never call you again this season?"

Mitch Eviston agrees with Fleisher's strategy. Eviston, director of national accounts for Mycogen Seeds, says the savvy shopper can purchase a product alone or a product with value-enhanced services added, depending on his or her needs. "If the net price is all you care about, shop around," he advises. "If you need value-enhanced services such as warehousing, scouting and financing terms, then you need to buy a product with services added to it."

Eviston adds that Mycogen Seeds, which is an affiliate of Dow AgroSciences, offers financing terms for seed but not in a bundled package with Dow's crop-protection products. For more information, contact Mycogen Seeds, Box 21428, St. Paul, MN 55121, 800/380-7282.

Two inputs, same terms Some companies are taking a bundled approach. Novartis is offering its AgriFit program for the second year in 2001. It offers NK brand seed in conjunction with purchases of Novartis Crop Protection products. To qualify, growers must purchase a minimum of $10,000 of NK brand seed and $5,000 of specific Novartis Crop Protection products. Growers who decide early can finance both seed and selected herbicides at up to 2% below the prime interest rate. Several additional services supplement the program to fit various customer needs. These include early pay savings, flexible seed financing and a volume purchase program.

"In the past, input decisions could be made separately, but as new seed and herbicide choices become available, a decision for one often affects the other," says Marc Hennen, corn marketing manager. "We're offering a joint financing package so when customers make their seed and herbicide decisions, both inputs can be purchased on the same extended terms." For more information, contact Novartis Seeds, Dept. FIN, 7500 Olson Memorial Hwy., Golden Valley, MN 55427, 763/593-7128, www.nk.com.

Net income guarantee For 2001, Monsanto is focusing on building bundles that add value to the grower's bottom line through its Bottom-Line Booster Guarantee. Monsanto guarantees that the net income of the Roundup Ready Soybean System will be equal to or greater than that from a conventional program, or the company will make up the difference - up to $20/acre or a maximum of $10,000/grower, according to Mark Hermann, director of Monsanto Brand Seeds, U.S. The program requires the use of Roundup as a burndown and as an in-crop application and Roundup Ready soybeans.

Monsanto also is providing growers options for its Asgrow and Dekalb brand seed purchases that include customer early payment discounts and financing options. A cash discount is 7% for payments made by January 5, 2001. One option includes 0% financing until November 25, 2001, if seed is ordered by January 10 with a minimum order of $7,500. For more information, contact Monsanto Ag Products, 800 N. Lindbergh Blvd., St Louis, MO 63167, call Kurt Rahe, Roundup Ready soybean market manager, at 800/768-6387.

Small companies get in the game To compete with large input suppliers, smaller companies are also providing farmers with financing options. "Farmers were paying for their seed later and later, so we started looking for a way that would help them and help ourselves at the same time," explains Ken Heinzmann, general manager of Gateway Global Seeds, which is offering a simple, straightforward financing strategy for 2001. When farmers buy a minimum of $5,000 of seed, the company agrees to pay the interest costs at a fixed rate for up to one year. Farmers can secure their financing through any lending institution. Although a grower isn't locked into any commitment other than the $5,000 minimum seed purchase, Heinzmann says that services are added based on the volume of the farmer's total purchases. For more information, contact Gateway Global Seeds, Dept. FIN, 5517 Van Buren Rd., Nashville, IL 62263, 618/327-8000, e-mail kheinzmann@aol.com.

You'd better shop around Zimmer worries that the plethora of manufacturer financing programs available is confusing to growers. He believes some are useful. Others, he worries, are too much hype and too little help. "Farmers need to talk with dealers and reps they trust and to each other to sort through them," he advises.

Fleisher agrees and adds that although financing inputs is a sensitive subject, a farmer needs to discuss it with other farmers he trusts. The process isn't always comfortable, but the feedback from other growers will help him evaluate suppliers' terms.

Fleisher encourages farmers to continue using the old-fashioned strategy of shopping around for inputs. "Some of these big packaged deals are easy and convenient, but before you jump into one, talk to other suppliers and your local lender and don't be afraid to ask for a better deal," he encourages. "It takes effort, and it's uncomfortable, but it could help you make ends meet this year."