No matter which varieties you choose, the financials are critical. You know you intend to plant seed next year. If you can get a large discount just for paying early, why wouldn’t you take it?
IF YOU HAVE THE CASH – Banks are paying almost nothing for your savings account, so seed discounts offer a much, much better return for your money.
IF YOU NEED TO BORROW MONEY – It still pays to prepay your seed bill and take the discount. Interest rates are historically low this year, and it could be a very easy discussion with your banker to run the numbers and get a great return on investment this fall.
FOR EXAMPLE – If the seed discount is 12% APR and you can borrow for 4% APR on $100,000, that means paying in September vs. paying in April saves you 8% APR net during that time.
Running the simple math, that’s:
$100,000 X 8% ÷ 12 months X 7 months = $4,667!
Even if you are financing through a seed company’s finance program, you are still ahead to lock that up now, because the sooner the seed company gets the cash from the finance company (like Rabo, JDF, etc.), the better price you get. Yes, you may find a 0% interest offer in the spring just like you will this fall, but in almost all cases the NET COST for you will be much higher waiting until spring.