Data from the Kansas City Federal Reserve shows that lending activity has weakened, influenced by farm loan interest rates reaching their highest levels since 2007 at an average of 8.34 percent. That translates to significantly increased financing costs for farmers.
Farmers need security and access to resources that can help them continue to grow their farms, and since 2016, WinField United has been developing and growing the SECURE Financing program to provide just that.
SECURE combines our retailer owner’s unmatched agronomic data and local expertise to provide farmers with access to attractive, fixed-rate lines of credit for input purchases. Farmers can fill out a one-page application that, depending on their credit rating, can get them up to a $500,000 line of credit that they can use to pay for crop inputs and other products offered by their local retailer throughout the season.
What separates SECURE from a lot of other loan programs is the ease of application. Ben Jacobs, sales lead for the Cokato location of retail-owner CentraSota, says the application and approval process for SECURE removes the hassle of trying figure out what loans a farmer is eligible for.
“A lot of times, each manufacturer of equipment has their own loan program, and it becomes a headache trying to keep track of where loans are coming from and where money needs to go,” Ben says. “Ease of use and not having to worry about which manufacturer a product is coming from makes SECURE very versatile.”
WinField United Director of Services Mike Anderson says that versatility and the security of a fixed interest rate on a loan helps farmers feel more secure in their investments, and it helps retailers keep business coming through their door.
“The loan is serviced by someone a farmer trusts – their local retailer,” Mike says. “It makes purchasing from that retailer more streamlined, which gives our retailers an opportunity to provide a one-stop shopping experience to help provide a financing solution that covers the whole spectrum of crop inputs.”
Part of that security also comes from the length of the maturity date of the loan. Whatever is borrowed isn’t due until February of the following crop year, which allows a grower to put crop input purchases on either side of the tax year.
“This provides more flexibility depending on how many crops they sell in a particular year and which side of the tax year they want to put their expenses on,” Ben says.
In addition to the grower benefits, SECURE also serves as a great retention tool for retailers. For instance, 88% of growers using SECURE for seed purchases returned to buy seed the following year.
Over the past seven growing seasons, more and more farmers and retailers have discovered the benefits of SECURE. During its pilot year, the program financed around $90 million in loans, and it has grown steadily ever since. In 2023, it financed over $1 billion in loans to 6,000 growers, covering upward of 9 million acres of farmland.
This rapid and sustained growth of SECURE shows how effective of a tool it can be in not only the inherent value of the program, but it also shows that farmers and retailers are buying into it.
“The more unique and compelling offerings you can bring to a farmer, the more opportunities you have to build a robust and deep relationship,” Mike says. “There's a huge opportunity for farmer operations to grow right now. SECURE is an important tool for WinField United to help enable the growth of our customers.”
Entering the 2024 growing season in a still-turbulent economy, Mike says there is even more opportunity for SECURE to capitalize on its success up to this point. Last year, purchases made using SECURE loans accounted for less than 20 percent of the inputs that WinField United sells to growers.
That, Mike says, means there is still room for SECURE to make buying from the WinField United retail network even more simple and convenient.
“We're in turbulent times with interest rates, but we have a great opportunity keep doing what has made SECURE successful as a tool so far,” Mike says, “and to also continue to evolve, grow and make the program better for our members and retailers.”