Source: Illinois Farm Bureau Federation

Input "prepay" is an attractive option for many cost-conscious producers. But it carries some significant risks if the supplier ultimately can't come through with the goods.

Illinois Farm Bureau's Resolution Committee is asking producer-delegates in December to consider creation of an insurance fund for farm input prepayments similar to the state's existing grain insurance fund.

Paul Rasmussen, chairman of the RC's Ag Production-National Issues Subcommittee, noted increased prepayment for seed, feed, fertilizer, chemicals or services to lock in supplies or capture discounts offered with advance orders. Given credit constraints and new federal banking regulations, farm finances will even be tighter and more suppliers will offer prepay discounts, according to Will County Farm Bureau, which originated the RC resolution.

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