Knowledge Centre

Ask Canadian farmers how things have changed in the past 20 years and they’ll tell you about commodity prices, less predictable weather, and new production technologies. But top of mind is likely the spike in input costs – over the decades, and in the last few months.

That’s why it’s fortunate that for 20 years, Scotiabank’s Agricultural Banking group has offered the Yield More Financing™ program, which enables farm supply dealers to provide their customers with quick, efficient credit for seed, feed, fertilizer and other input purchases.   

And while leading dealers like Saskatchewan’s ProSoils and Ontario’s Horizon Seeds rave about the Bank’s credit solutions, Scotiabank is marking two decades in Indirect Ag Financing with new options to support producers’ evolving input and operating needs. 

A vision to help weather Ag uncertainties

“Back in 2002, when we were among the first to introduce this product we saw the need to help dealers and producers manage input costs,” recalls Eleni Ladacakos, Senior Client Relationship Manager on Scotiabank’s Yield More Financing team. 

She explains how, with Yield More Financing, dealers can provide credit to their farmer customers to purchase needed inputs and not make a payment until they’ve turned their crop into cash, up to 18 months later.  The producer can use this year-round revolving line of credit for each season’s needs and the dealer typically gets paid by the Bank within two business days, so neither dealer nor producer face cash flow or liquidity challenges over the long crop growing cycle. 

“Our clients have really seen how ‘We get ag’, since this product helps producers handle the uncertainties, and plan for the next year, while dealers can ‘yield more’ sales from their valued and loyal customers,” observes Mike Schankula, Director and Group Lead, Scotiabank Indirect Ag Financing. 

This is especially true lately, with recent sky-high input prices, from fertilizer to chemicals to seeds, notes Schankula: “Such inflation means that a producer, instead of focusing on their land, may be focused on increasing their borrowing facilities, to pay these increased costs. The dealer would incur added risk since they must purchase more costly inventory and then collect on their customers’ invoices. Yield More Financing brings a level of comfort to everyone, as farmers can buy the inputs they need, and the dealer can properly advise and support them, without worrying about the impact on their working capital.” 

Deliver input advice, without the financial worry

“Yield More lets us grow our business selling seeds, rather than worrying about the credit risk,” says Rick Van Laecke, who, along with his wife, son and daughter-in-law, leads Horizon Seeds, an independent, family-owned, Canadian seed company, in Courtland, Ontario. Since 2006, Horizon has focused on ‘improving lives by realizing the potential of seed,’ developing corn hybrids, building ‘feel good’ dealer relationships, and delivering top service and product. 

Van Laecke notes proudly that, “On our 15th anniversary we expanded to serve dealers across western Canada, so now our product is planted from Vancouver Island to PEI.” To help do so, Horizon introduced Yield More Financing options to build solid relationships with new clientele. “As our business has grown, I no longer know every customer well enough to provide inhouse credit. Instead, Eleni at Scotiabank helped us tailor a program, so our dealers can grow their sales without increasing their own credit risk, and they can tell their customers, ‘Order your seed today and don’t pay interest until the next year.’” 

And family-owned ProSoils, of Rose Valley Saskatchewan, can vouch for the long-term value Yield More Financing has brought to this full service ag. dealer, and its oil seed and cereals producer customers, since 2013. “We’re focused on becoming entrenched as a partner to our customers by helping them procure all the inputs they need, in their budget, so they have the right product, the right rate, the right time for the right result,” says Jeff Prosko, President, noting that they recently acquired a complementary dealership in nearby Lipton.

ProSoils Sales Manager Bart Hartl explains how Yield More Financing enabled the company to grow its sales volumes and bottom line, while procuring high-demand products amid supply chain shortages.  “We can buy product better and sell it better, since we know our producers’ buying cycles and cash flow. It allows our dealership to spend less time on the transaction side, and focus more on the service side, interacting with producers, since we know the financing side is taking care of itself.”

Hartl adds that producers prefer to work with dealers and their partners who really care about their needs, particularly when crop input costs spike: “Last fall, Scotiabank was very good at working with our producers proactively to provide credit approvals in advance of anticipated rising costs. Now everyone is pretty well set up, so they will have the resources they need ‘on farm’ when the season begins.” 

Solutions for the next 20 years:

While Scotiabank Yield More Financing has been a tried-and-true solution for dealers and producers for 20 years, the Bank keeps expanding its indirect borrowing services in response to changing agriculture conditions.

“We’ve witnessed how unforeseen events, which are outside a producer’s control, are impacting this industry, including volatile weather,” says Schankula. “We’ve launched a series of flexible products to support our farmers no matter what comes their way.”

For example, Scotiabank is among the first financial institutions to introduce the ‘short close grain contract’ program. This borrowing product is designed for cash croppers who typically sell forward their anticipated crop to an elevator but face the risk of contract penalties if adverse weather reduces their production.

“Since a producer might need to find cash to make up for a shortfall, we’ve come up with a bridge financing solution with growers and elevators who are associated with this program, so we can quickly help the producer satisfy the contract without impacting their cash flow,” explains Schankula. “It’s a win for the producer who gets time to make up for their short, and it’s a win for the elevator who can meet their market obligation.”

In addition, Scotiabank has launched less traditional, ‘digital services financing’ to support the many growers who today practice digital agronomy and depend on digital support and subscription services to monitor growing conditions and optimize their watering, fertilizing and harvesting strategies.

“Producers have gone way beyond seed, feed and chemical - to ‘info tech’ to maximize their yields – so we’re making sure they can access the less-traditional inputs necessary to make their operation successful,” says Ladacakos.

While the agriculture sector has evolved over two decades, ProSoils’ Bart Hartl sums up the un-changing teamwork between producers, dealers, suppliers and their bankers: “Increasing world demand means we must get more out of the land we have, and we all want to work together, to help these producers grow their crops, get it to market, and feed the world. But we can’t do it on hopes and dreams – It takes good partnerships and solid financing backing to yield more and take things to the next level.”

For more details and to sign-up for Yield More Financing call 1-866-603-4188 or email yieldmorefinancing@scotiabank.com.