Agronomy. Answers. Yield. Aug/Sept 2020 Mobile Article Header Image Saving Money with Fall Fill Programs

Did you know that over the last 4 years, Roundup pricing on average has gone up 19.8% between September and June?

See the chart below.

Roundup price increase graph

Considering that’s only 9 months, that means on an APR basis you are looking at over 26%!! In other words, as long as you can borrow money for less than 26%, you come out ahead.

Why are prices always cheaper on crop protection products like Roundup in the fall?

It’s 3 big things:

Crop protection manufacturers incentivize retailers to take bulk product when it’s produced so they don’t have to build or lease more storage facilities. The earlier product is taken, the higher the incentive, in most cases. Once retailers sell their “early fill” gallons, their prices go up.

Interest. By purchasing early, retailers can take advantage of cash discounts. Most of the time, retailers simply pass this on to farmers who want to pay for product (or finance it) early.

Reaching “target volumes” in-season. I know this may sound crazy to you, as a private business owner, but corporate America operates with different objectives than you and me. Stockholders always want sales increases. That’s the goal. However, if sales go up “too much” in any given year, achieving a sales increase again the following year becomes almost impossible. When company executives can’t hit their targets routinely in the corporate world, they get fired. In order to keep sales closer to the target, in-season price increases are common when companies near their goals.

What are the advantages for my farm if I buy one of these “fill program” products in September?
There are many, including cost savings, picking up product at a time of year when you’re not busy, having product on hand when you need it, and having no risk in leaving your prepay money somewhere. With these early stocking programs, you pay, and then you get product immediately.

For about 10 years, we’ve run fall fill programs at Hefty Seed Company. We have done as much as 10% of our total business for the following year during the first three weeks of September a couple of times. We have also had more than 25% of the next year’s glyphosate picked up by farmers between September 1 and September 20. I realize that fall fill is not for everyone, but if you have cash or can get cash, it is a good way to reduce your net costs, even if you have to borrow money.

Every year I get several agronomists who will tell me, “My farmers aren’t ready to buy, yet.” What I always tell our people to relay to you is this. Each year I get thousands of farmers who ask me to help them save money and cut expenses.

I wouldn’t even talk to you about these summer/fall fill programs if they weren’t a good deal for you.

If you can save 15% to 20% on your crop protection products, isn’t it worth it to buy at least a portion of what you need right now? If you spend $100,000 on crop protection, that’s saving $15,000 to $20,000 each year!!! By the way, there is price protection on almost every single product all the way through next spring, so there is very little risk for you.

As I am writing this article, I can’t tell you exactly what the fall deals will be. I can promise you we will have some fantastic deals beginning September 1, but anything we do will be limited to a certain number of gallons. This goes back to how much companies are willing to ship us on an early fill program.
Keep in mind that the manufacturers want to make as much money as possible, so when it comes to anything they can produce and ship in the spring, they would much rather do that than produce it now and have to pay us to take it early.

For products that do not have a special fill program, we still allow you to prepay by September 18 to save 2% off our December prices.

In other words, you aren’t locked into anything if you simply prepay by September 18. If you want one of the fall fill specials, you would have to actually take that product, but those prices would be more than 2% off December, of course.

Finally, if you aren’t sure if you will need the tax deduction in this year vs. next year, we work with lots of farmers each year to either send them money back or receive more money from them so their expenses are at the correct level on December 31. Just talk to one of our agronomists or e-mail me if you have questions about that. We would really appreciate your business, whether it’s in September, December, or any month of the year.

Contact your local Hefty Agronomist to start saving TODAY!