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Consider Discount Programs to Offset Higher Seed Cost

Buying seed with traits usually means paying more.

Tom J Bechman 1, Editor, Indiana Prairie Farmer

October 10, 2007

3 Min Read

If you can get your seedsman to give you a definite price that you will pay for seed next spring for planting corn, you may be ahead of the game. Not all companies have yet set pricing strategies. Word on the street and in coffee shops and chat rooms is that seed price will be higher, sometimes substantially. But so far at least some companies seem content to talk in vague terms about seed prices.

Also, most are pushing triple stacks with corn borer and new rootworm protection, plus Roundup Ready tolerance. Some, including Herculex brands offered by Pioneer Hybrids, International and a host of smaller companies, containing the Herculex trait for rootworm, also contain built-in Liberty Link tolerance, meaning a grower could come back with either Roundup or Liberty for post-season weed control.

Stacked hybrids will also be offered by large industry players, including Monsanto and Syngenta. While the companies shy away from talking specifics on price for particular hybrids, general talk in the country is that prices will go up,. Pioneer refers to it as 'moderate' price increases.

What companies are more willing to talk about are discount programs. Pioneer, for example, says there's a sizable discount of up to 9% for farmers who pay cash by an early, specified date. Or they can apply for Pioneer financing. If accepted, they get an 8% discount per unit, plus a low finance rate, usually one percentage point below the prime rate.

If you prefer to wait later to commit to seed purchases and make payment, there will be an option to let you pay at a later date, but still reap a somewhat similar but slightly smaller discount, and still be eligible for the low interest rate, Volume discounts will also apply, Pioneer spokesmen say.

One other small company in the industry is trying a different approach this season. While their prices aren't firm, they're estimating a moderate increase. But they're offering customers who buy a specified large quantity of seed to obtain it at last year's price.

Some folks question how companies can sell seed in August and September, as some have, before farmers see this year's hybrids and how they performed. One insider in a company that successfully sells early says that they allow a certain amount of shifting of hybrids and varieties, as long as the customer who signed up early remains loyal to them.

The message seems clear. List price for seed could be higher for '08, especially for stacked –trait hybrids that purportedly have higher value. But most companies offer various discount incentives to get farmers to do business with them. In some cases, they're also trying to lock in business early, to help with cash flow and solidify their seed needs for next season.

Early indications are that seed supply for corn should not be aporblem next season. Seed yields were good and harvest was early for much of this eyar' seed crop. That typically translates into good supply.

About the Author(s)

Tom J Bechman 1

Editor, Indiana Prairie Farmer

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