How To Optimize Your Seed Discount

10:39AM Dec 05, 2019
Seed Corn Discounts: Financing, Order Dates and Volume
A study by University of Illinois and Cornell University shows locking in financing early with a bulk order can lead to higher discounts from the base seed price.
( Data Source: Farmdoc )

As you consider your seed options for 2020, you’re undoubtedly being inundated with offers from seed companies: volume discounts, early cash discounts and financing options. How do you navigate these waters to find the best option for your operation?

“ROI is more of a function of yield, not the seed price, so always evaluate hybrid yield potential first,” says Ken Ferrie, Farm Journal Field Agronomist.

While price isn’t the only factor to consider, it’s important nonetheless. A variety of factors are involved in seed prices and timing of the buying decision:

  • Order date: The earlier in the year the order, the better price you’ll likely receive.
  • Payment Choice: Typically paying in cash ahead of delivery can trigger discounts.
  • Partnerships: Some firms have internal financing or financing partners that give discounts for using them.
  • Quantity: The bigger the order volume, the better the final price could be.
  • Seed treatments: Especially in soybeans, seed treatments can add to overall seed cost and should be recognized when comparing prices.
  • Zone pricing: Many companies charge farmers in certain areas relatively more for products they perceive to be more valuable in those areas.

Examine your balance sheet and cash availability to determine how to obtain the best seed corn discount and purchase options.

Agronomics Drive Decisions

Every year, you should prioritize the right seed on the right acre, as cheaper price tags could lead to painfully low yields. Seed company experts recommend starting with this checklist to focus seed choices on the options that best fit the agronomic needs of your fields:

  • Narrow down maturity. Corn needs to reach black layer a minimum of two weeks before a killing frost. Review your weather history.
  • Establish a yield goal. Use historical yield data to determine what each field can produce and select seed with that potential.
  • Plan your defense. Don’t neglect to consider disease and insect history for each field and select defensive traits accordingly.
  • Diversify Your Lineup. Compare seed information to make sure characteristics don’t match too closely across hybrids. Be sure to check hybrid and variety numbers to ensure you don’t unknowingly plant the same option twice.

All things equal, Ferrie says, decisions based on price can come into play when you find two hybrids that both offer what you need. “You can then choose the one that will get the job done for the cheapest investment,” he says.

Work with your agronomist and input providers to make sure you prioritize genetics that best match to your farm. Don’t fall prey to just an attractive discount. 

2020 Seed Supply Outlook

Late planting will undoubtedly play a role in corn and soybean seed yields and quality for next year.

“Performance of the seed at pollination was pretty good, and usually nice pollination and yields translates to quality,” says Jim Herr, Beck’s production manager. “Given our expectations and what we saw at the end of June, we’re pretty pleased with the quality of seed corn on all levels.”

Overall, seed companies are indicating that corn yields are average and well within their budgets for seed needs in 2020.

“As part of our normal course of business, we made some seed production adjustments,” says Mark Deterding, Corteva Agriscience global seed production and supply chain leader.

Seed companies plan for some excess seed to offset any lower yields. Bayer says another way to spread risk is growing seed across  a wide geography. Given this year’s challenges, those plans can help reduce the chance of limited options.

Soybean Seed Faces More Challenges

“The story for soybeans is somewhat different, and we have several variables that are unknown,” says Ryan White, Syngenta head of North America seed production and supply chain. “With the delayed harvest, there are only a few seed soybeans with quality results in so far to give us a picture of the quality. The first soybeans into our soybean production plants are showing smaller seed size, and overall quality is good.”

While size might mean farmers need to adjust planter disks, it shouldn’t impact germination and other quality concerns like the 2019 planting supply had. The big question is if the quality seen so far in seed harvest will hold or deteriorate.