Utilize Early Order Discount Programs to Lower Farm Input Costs

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I often like to sit down and have a cup of coffee with local farmers, or will have informal conversation at the gas pumps. It is a great way to keep in touch with what is happening in the farming industry. One constant topic of conversation that I have noticed recently has been the rising cost of inputs. When considering farm economics and business planning, it doesn’t take much research to realize that input costs have greatly risen over the last few years. Many of the commodity and market reports; however, have indicated lowering market prices and a bleak outlook. For example, recent reports have indicated the North Carolina farmers are potentially facing the lowest net farm income that we have seen in many years. Now, I don’t want to be an alarmist, but as a farmer myself, I know that it is very important to take advantage of every opportunity to lower production costs.

As a vegetable producer myself, I like to take advantage of early seed ordering discount programs. Many of the mainline vegetable seed companies offer early order discount programs. Some require actual seed or plant orders to be placed. Other programs accept advance payment into an account that will allow for discounted seed purchases later in the year. I personally like the later option the best because the pay in advance programs still allow me the opportunity to try the newest varieties that might not be released, or that I may not be fully aware of until after attending conferences and workshops held in the winter. Some programs offer as much as a 10-15% discount when orders or payment is made in the fall of the year. Whatever the format of the early discount programs, it is not a bad idea to take advantage of these programs offered by seed or other input companies whenever possible to lower input costs for next year’s crop.

Some may ask, “what is the catch?”  The biggest drawback to these programs is that most, that I have encountered or utilize, require purchases made by cash or check. Although, I have seen some programs that offer discounts through credit programs. If purchasing with credit programs, it is important to understand the terms of payment. Pay close attention to interest rates as they may not offer any discount at all. Some “pay by credit” programs may actually result in paying more than would paid with regular purchase terms offered by input companies. Most early discount purchase programs that I have seen do not offer the early discount if growers are trying to make purchases on personal or company credit cards.

Even though they may result in a small reduction of input costs, early discount purchases might be an option for some farmers. If you are considering early discount programs for input purchases on your farm, and if you would like assistance reviewing them, please feel free to contact N.C. Cooperative Extension of Yancey County.