The last 2.5 years in the United States have been some of the most tumultuous in history…

Between COVID and ethanol plants closing in the spring of 2020 to fertilizer prices, building costs, and interest rates crashing soon after that, it sure seemed like things were headed on a different path than where we’re at now with supply chain challenges and inflation.

FIRST OF ALL, HERE ARE SOME THINGS THAT ARE NOT CHANGING:

– TAX ADVANTAGES TO PREPAYING PRIOR TO THE END OF YOUR FISCAL YEAR.

Prepaying for crop inputs like seed, chemicals, and fertilizers still allows you to deduct those things from this year’s net income, meaning you pay a lower tax bill, at least for this year. Always check with your tax consultant, though, because there are rules and limits on this.

– YOU CAN HAVE YOUR MONEY BACK FROM US AT ANY TIME IF YOU CAN’T OR DON’T WANT TO USE IT FOR PRODUCT.

We may even give you an extra discount along with that money if it’s been here for a while. Just visit with one of our agronomists for the details.

– YOU LOCK IN SUPPLY WHEN YOU BOOK SPECIFIC PRODUCTS.

While supplies on most ag chemical products will be better this year, there will still be a number of things in tight supply. In terms of seed, we expect SmartStax and SmartStax PRO to sell out quickly, as well as any of the varieties people consider “hot” in their area.

– YOU FREE YOUR SCHEDULE TO WORK ON OTHER THINGS

You’re busy, and it’s nice to have something out of the way so you don’t have to worry about it going into the spring.

WHAT IS CHANGING?

Over the last couple of years, almost all ag chem manufacturers have gone away from allowing anyone to order product, prepay, and have their price locked in. We don’t know our costs until product shows up at our door. We have been bringing product in as fast as we can this fall, so we can guarantee pricing on most products when you prepay.

For 50 years, we offered price protection on all ag chemicals, but since most manufacturers have at least temporarily dropped price protection, we have had to, as well. Granted, we usually only had four or five products out of 1000 each year that would go down in price between December and May, but still, it was nice to have. There are some exceptions to this for 2023, including limited price protection on Roundup.

If you want to switch products in the spring, we no longer have what we used to call our “December price.” Instead, we’ll look at current price less 1% per month going back to when you prepaid, which basically comes out the same anyway. For example, if you bought a product in December, picked it up in March, returned it in May, and now you want to buy another product with your credit, since December is 5 months earlier than May, you’ll get 5% off our May price. That’s 12% APR!

Interest costs are up. If you need to borrow money, you will undoubtedly be looking at your cost versus the return, but since our prices go up at least 1% per month – 12% APR – prepaying is still a great option even if you need to take out a loan. Bayer, Valent, FMC, BASF, Corteva, and others do have finance programs with very low rates (usually either 0% or 1.9% APR), so those are great to take advantage of this December or January so you still get cheap prices, yet your bill doesn’t come due until next fall or winter, and your interest cost is minimal.