James Ryssenbeek, Agfarm Regional Manager VIC
Around the grounds – October 2018
Winter crop spending is slowing as we approach harvest. We’re still seeing some final spend on fungicides and insecticides for pulse and canola crops, as well as desiccating products. Diesel invoices are coming in now in preparation for harvest.
Summer crop facilities (cotton, corn, sorghum and forage crops) are starting to ramp up as soil temperatures are right for most summer crops to start planting. High water costs have significantly decreased the ability for traditional summer croppers to participate in all irrigated cropping options this season which will result in reduce planting. However, in some cases like corn, historically high market prices mean gross margins year on year are similar.
We are also starting to have discussions for 2019/20 funding. If you would like to discuss your financing options for 2019/20, be sure to give your Regional Manager a call.
Back to basics – what is crop input finance?
Agfarm has been offering input finance since 2014 and as the business continues to grow we have found there is a lot of misinformation about what input finance actually is, and how to utilise it within your business. Here we address some frequent questions using Agfarm Accelerate as an example.
What is crop input finance?
Crop input finance is a cashflow tool which enables users to purchase their crop inputs as required throughout the season and pay for them post-harvest from crop sale proceeds. Agfarm Accelerate supports winter and summer cropping programs – cereals, oilseeds, pulses, cotton (irrigated only), corn, sorghum, hay and forage crops. Both irrigated and dryland.
What are the benefits?
Benefits vary depending on your circumstances. Below are examples we’ve seen over the years:
- Easy. Access to all major inputs, no cash, bills are paid on time, easily reconcilable
- Aligns income with expenses for better cashflow control
- Allows better use of other cash facilities ie. buying livestock, repairs, upgrades
- Offsets other higher interest facilities – Agfarm Accelerate starts at 6.24% p.a.
- Fast turnaround to maximise on opportunities ie. additional unbudgeted fertiliser
- Flexible repayment options
What can I put onto the account?
Offers vary depending on the financier, but Agfarm’s Accelerate facility will finance seed, fertiliser, agchem, fuel, water, crop insurance and land lease payments. You manage your purchases throughout the growing season, the financier (Agfarm) pays the invoices as they’re due to the merchandise store on the producers’ behalf.
How much can I borrow?
Agfarm’s ‘safe level’ of funding is determined using a combination of crop value and financial strength of the borrower. Each providers idea of risk will vary, so be sure to ask the question when making comparisons.
Tip – Ask for what you require, not what you think the finance company can do. If the financier can’t meet your requirements, they should let you know what they can achieve.
How is it repaid?
Again, offers will vary, but most crop input finance programs are repaid with the crop sale proceeds. Agfarm Accelerate can be repaid 3 ways:
Sell grain to Agfarm. We have daily contract prices in all port zones. Give us a call.
Utilise Agfarm marketing programs Advantage or Warehouse Cash.
Sell grain to the open market, with a direction to pay issued to the buyer so the funds are directed to your Accelerate facility.
Industry Report – Agfarm’s agribusiness reporting top pick for the month.
“The median price of farmland in South Australia increased by 17.1 per cent in 2017, after almost a decade of little change!”
Reid Seaby WA Regional Manager | 0439 625 853
Kate Phillips SA Regional Manager | 0438 128 472
Anthony Hall QLD & NSW Regional Manager | 0400 873 777
James Ryssenbeek VIC Regional Manager | 0447 743 556