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Next Generation Farming

As Costs Rise, Shopping For Deals Pays Off

High variability in fertilizer and bank loans requires shopping for best rates.

It's no secret fertilizer prices are high and expected to continue rising. But after calling around to various suppliers in our area to pre-pay fertilizer ahead of the New Year, I was in near disbelief of the price ranges on anhydrous ammonia. Some suppliers are offering extremely competitive rates if you're willing to shop around. 

One supplier in our local area quoted their anhydrous at $775/ton with an additional $10 charge for delivery to the field. Another supplier in the area offered anhydrous substantially lower at $740/ton – but with no prepay plan and no delivery.

A third supplier made the best offer yet – $725/ton, with the tanks delivered straight to the field at no extra charge. The only catch was that after three months, you're charged $10/ton per month for every ton unused. That means that any anhydrous we haven't used by April would cost $735/ton, and by May would cost $745/ton. But even with the additional monthly storage charges, it was still no contest. The third supplier still had the best deal on the street. We ended up locking in our fertilizer needs for this spring with the third supplier, who even came by our house to pick up the check.  

We spoke for a while about what he anticipates fertilizer prices to do in the future, and why there's such a huge difference in local prices. Fertilizer prices will likely continue going up with commodity prices through spring, he said, with increasing corn acreage driving the market.

As for why the huge difference between competitors…he didn't know, but he did offer one enlightening thought. Did it matter? I pondered that a bit and handed him the check.

The same held true for bank loans. My wife and I needed to get a new car at the end of the year and checked around for what we could get on interest rates. Banks in our local area weren't offering anything impressive with rates ranging from 5.5% to 7%. But through the car dealer's credit union, we were able to lock in a rate of only 2.99%. That's half of what we were able to get locally.

Over the years we've discovered the same holds true on almost everything including tractors, parts and tires: Calling around to suppliers and checking the competition will not only reveal a high level of variability in prices, but you'll eventually find a grand-slam deal that doesn't compare with the other competitors.

My wife may be the all-time queen of finding the best deals. After doing some exhaustive research on credit cards last year, we found one with a fantastic rewards system. By using that card almost exclusively throughout the year, we accumulated so many points we got all of our Christmas presents for the family for free…with plenty of points leftover to buy presents for ourselves. The best present was knowing we scored big on getting the best deal around
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