Input Capital tests new “mortgage streaming” contracts

A Regina-based company that buys unharvested canola from farmers through streaming contracts is dipping its toes into the farmland mortgage market.

Input Capital Corp. announced Jan. 30 that it has launched a new “mortgage stream” on a pilot project basis.

New mortgage contracts will offer growers an opportunity to meet mortgage obligations by entering canola production contracts with Input Capital.

“Since we began streaming five years ago, we have observed farmers take interest in using canola streams to meet working capital needs in their farm businesses,” said president Doug Emsley.

“We have also seen considerable farmer interest in using streaming strategies to finance other types of farm capital like equipment leases and farm real estate mortgages.

“In response to this customer feedback, our team has developed a conventional farmland mortgage product that uses canola streaming as a payment vehicle. Our intention is to use this pilot period to assess market demand for this product and fine-tune product features prior to formally launching mortgage streams later this year.”

In a recent news release, Input said it wrote its first “mortgage stream” contract in the amount of $400,000 with an existing client who farms in Saskatchewan.

The client was attracted by the idea of making mortgage payments using contracted canola production.

Input officials said the company has a growing list of clients who have indicated an interest in the possibility of entering similar agreements.

Western Producer efforts to contact Input Capital Corp. for additional information were unsuccessful.

Input is an agriculture commodity company that buys and sells canola, the largest and most profitable crop in Western Canada.

The company enters into multi-year canola streaming contracts with canola farmers in the prairie provinces and buys a fixed volume of canola annually for the duration of each producer’s contract.

As of Sept. 30, 2017, the publicly traded company (TSXV: INP) had canola reserves of 405,000 tonnes, up from 259,000 tonnes a year earlier.

As of late last year, Input had canola supply or “streaming” contracts with 301 canola farmers in Western Canada, including 221 growers in Saskatchewan, 71 in Alberta and nine in Manitoba.

In its 2017 fiscal year, the company signed 297 streaming contracts, issued payments of $36.8 million, added 199 new growers to its client list and sourced more than 300,000 tonnes of canola.

Revenues from canola sales during the 12 month period that ended Sept. 30, 2017, exceeded $34 million.

Contact brian.cross@producer.com

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