Better Farming - December 2016

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40 Dig Deeper: Better Farming December 2016
CROPS: YIELDMATTER$
Selecting next year’s corn hybrids
Seed companies offer a variety of incentives to farmers who place their orders before the end of the
year. Consider trial data and your relationship with your dealer when ordering your seed.
by DALE COWAN
The end of the year is a busy
time for just about everyone in
agriculture – including the per-
son trying to secure a seed order
from you.
During these months, seed
companies want to review the total
number of orders for each hybrid.
The companies then match that
information up with their own seed
production and availability listings.
While each farmer may only order
a few bags or a few hundred bags of
seed, the seed companies need to plan
logistics for millions of bags of seed.
And these bags need to be sorted by
seed size and treatments for each
region in which the company oper-
ates. It is not unusual for each hybrid
to have 12-digit stock keeping units
(SKUs) based on seed sizes and
treatment combinations.
The logistics for servicing thou-
sands of customers is a challenging
one. For this reason the companies
cannot wait until spring for a farmer
to make a purchasing decision. To
encourage customers to place their
orders in December, seed companies
offer all sorts of marketing incentives.
Such offerings include early order dis-
counts, volume discounts that decline
with each passing month, and prepay
discounts. Typically, the latter
discounts are greater than the cost of
borrowed money. Some companies
even offer free financing until spring.
You have to ask yourself: are the
incentives reason enough to order
seed from a particular seed company?
The answer should be no. These
incentives are merely factors influ-
encing the bigger purchasing deci-
sion, but they impact money manage-
ment and can optimize work capital.
Indeed, some discounts for high
volumes, early order, and prepay can
be as high as 10 to 15 per cent. On a
$300 bag of hybrid corn seed, these
discounts can translate into a savings
of $30.00 to $45.00 per bag. Or, at
32,000 seeds per acre, this equates to
cost savings of $12.00 to $18.00 an
acre on seed.
I have been around the industry
long enough to have participated in
many surveys concerning what drives
In on-farm trials, farmers can compare their current selections
with new hybrids – and see how the results stack up.
Kent Wolfe, AGRIS Cooperative photo