What started as a small pilot program designed to provide an alternative crop inputs financing program for growers, SECURE by WinField United has become a market differentiator and growth driver for our retail-owners. Good news, it's a win-win for everyone, including growers.
We sat down with Nelson Neale, director of WinField United Services and learned all about the program and its benefits.
Q: What is WinField United SECURE exactly and where did it come from?
Neale: The program started in 2016 as a pilot in the Red River Valley (Minnesota and North Dakota) and was designed to provide alternative crop inputs financing for growers of our retail-owners in the area. At the time, WinField United and our retail-owners faced competitive threats for grower business in the form of attractive financing terms. The field sales staff identified the threat and the need, and we were able to quickly partner with a third party to design the program and specifications and gain access to risk capital.
Everyone, including farmers, has enjoyed a low-interest rate environment over the last 10 years; however, rates have been steadily rising since 2016. Subsequently, those rising rates are coming at a time when the farm economy is down, so lending through conventional banking channels has been less plentiful. People are looking for help, retailers and growers need our help, and we have been able to offer it to them.
Now, two years later, we have over 2,600 grower loans, with over 500 new grower accounts this year, with over $350 million loaned. This is nearly a fourfold increase in the number of loans and a nearly threefold increase in the committed dollar amount from 2016.
Q: What are the benefits for the retail-owner to take advantage of this program?
Neale: There are several benefits from participation in the SECURE program. First, we offer highly competitive financing rates to the grower which in turn can typically be used to help drive incremental sales. Second, SECURE offers a single platform to finance most of the products in the WinField United portfolio. Third, the simple, one-page application allows retail sellers to quickly and easily position the financing offer. Our sellers can also help our customers and their growers come up with a strategic plan to utilize dollars based on their needs. We are reinforcing our commitment to our customers that we are here to provide comprehensive services that will help them grow.
Q: What about growers? How does this help them?
Not only is this a differentiator for retail-owners, it's a growth driver for new and existing growers. It's low-interest rate financing during a time when options in the industry are becoming more limited. It can be used to take advantage of pre-pay discounts from manufacturers. And like retail-owners, it provides a simple, single point of financing for all seed and crop protection product purchases.
When we think about our services and products at WinField United, we want to be that one-stop shop providing the right tools, data and expertise to help our customers stay informed and make data-driven decisions to be successful and grow their business. SECURE is just one way to add on to our services portfolio for our customers.
"I've been in farming for 15 years now and I still use a line of credit to help pay for inputs to grow crops each year. Financing is important to my operation. Interest rates do keep rising on local lines of credit that you can obtain from local banks or from farm credit. They have variable rates throughout the year, and they are looking harder at the credit risk with the low commodity prices that we've had recently. [SECURE] has made doing business with the co-op a whole lot easier, it allows me to have a low rate financing line that is available to purchase their products and not be tied to a certain brand of chemical. It allows the co-op to pick the best product for my operations rather than staying within one line of chemical or seed."