Reuters / February 13, 2000
CHICAGO (Reuters) - Commodities giant Cargill Inc, the largest privately held company in the United States, and John Deere Credit said they will offer a new program this year to finance farmer expenses and cash flow.
The program, called Performance Finance, will offer straight loans and a variety of financing options tied to farmer contracts to deliver grain or buy farm inputs like seed or fertilizer, the companies said in a statement.
"It is basically a one-stop process that will help farmers manage time as well as cash flow," said Jerry Sullivan, John Deere Credit division manager.
John Deere Credit, an affiliate of Moline, Illinois-based farm equipment maker Deere and Co (DE.N), has 500,000 accounts and a managed portfolio of more than $11 billion.
Minneapolis, Minnesota-based Cargill is the world's largest commodities trader and a leading processor and exporter of farm goods from grains and cotton to meats and sugar. It produces seed, fertilizer and farm services like risk management.
Performance Finance offers four alternatives, with two giving farmers competitive interest rates to buy crop inputs for expenses below and above the $150,000 level.
A third option allows farmers to forward contract crops for future delivery and receive a loan based on part of the projected future value. Farmers pay off the loan at delivery of the grain and can elect to deliver well after harvest time if they wish, the statement said.
A fourth option allows farmers to receive a loan on any grain they currently possess.
Cargill is currently offering loans at 2 percentage points below bank prime rates on any of the program loans used to purchase farm inputs from Cargill, said Dennis Inman, grain origination manager at Cargill's AgHorizons division.:
