RACINE, Wis. - Your farm dollars are squarely in the crosshairs of exciting times. There’s the possibility of capturing near-record crop prices, with prices being potentially higher the longer you wait to sell.
On the other hand, crop input costs are spiking. Crop input retailers are incentivizing you with early-order discounts and possibly introducing a “first-come, first-served” policy for inputs in tight supply.
You want to buy now to take advantage of the early bookings, but you don’t have crop available to sell. Your current bank credit lines are at their limits or need to be settled prior to starting the new crop year.
CNH Capital America LLC, the financial services company of CNH Global, has been watching this type of situation become more common over the past several years. Cash crop farmers find themselves making significant investments in the next year’s crop while the current crop is still in the field. Their marketing plan may not generate immediate cash, yet making early payments into the next year’s crop inputs would capture significant savings.
To help farmers meet these special cash flow needs, CNH Capital has introduced a new program called CNH Capital Ag Resource. It’s offered through an expanding list of progressive regional crop input retailers who want to offer their customers convenient and competitive financing programs.
“CNH Capital has a strong heritage in agriculture. We understand agricultural, we’re committed to this market, and farmers know us through equipment financing,” explains David Swigart, who heads up Ag Input financing programs for CNH Capital.
CNH Capital offers three Ag Resource programs. Ag Resource Express can provide farmers from $5,000 up to $50,000 of unsecured credit. It’s an ideal product for paying for pre-season crop inputs and services.
The middle level program, called Ag Resource, provides financing for all products and services sold by the crop input retailer. Secured by a first lien on the crop, and with crop insurance required, Ag Resource offers financing beginning at $5,000 and without a maximum limit.
The third program, Ag Resource Plus, provides financing to cover the full range of crop inputs sold through the participating crop input retailer plus other crop production expenses including cash rent, labor, and other general operating costs. Like the Ag Resource program, there is no upper limit to funding. Collateral requirements for Ag Resource Plus include the crop and a broader range of farm assets excluding real estate.
Swigart says farmers are choosing Ag Resource financing for several reasons. These include the convenience of handling financing at the point of sale which eliminates the paperwork and communication involved with a third-party lender. With financing in place with the crop input retailer, it’s easier for the retailer to help the customer capture discounts for early order, bulk purchases and other incentives.
Another reason is that Ag Resource financing is based on a crop year. Additional loans can be put in place prior to settling current loans. “You could have financing in place for the 2008 crop year, and start another separate line to finance the 2009 inputs you want to secure on an early-order basis,” Swigart explains.
The ability to provide large loans is another factor users cite. CNH Capital can finance sums that may be beyond the capability of local lending sources.
And, Swigart notes, the CNH Capital Ag Resource financing is offered through the crop input retailer where a business relationship likely already exists. “That local relationship is important,” Swigart says. “We’ve seen the value of it through the long-standing relationships CNH Capital has with customers of Case IH dealers. Now farmers can have a similar relationship with their crop input retailer.”
Find a participating crop input retailer
The list of crop input retailers who provide CNH Capital Ag Resource financing is expanding. Find out who your nearest participating retailer is by contacting your local Case IH dealer or call (888) 333-2688.
CNH Capital Ag Resource crop input financing
The CNH Capital Ag Resource program offers financing for the cost of inputs sold by crop input retailers including seed, fertilizer, crop protection chemicals, custom application services, crop scouting services, fuel and lubricants.