Jay, a well-known farmer residing and farming in Kansas, granted Kansas Bank a security interest in all of his present and after-acquired farm products in exchange for a $10,000 loan to cover a new tractor. Kansas Bank properly perfected the security interest by filing in Kansas in April 2012.  A few months later, Jay entered into an agreement to purchase $6,000 worth of seeds from Mills Feed and Supply on account. Mills Feed and Supply filed a UCC-1 financing statement in Kansas (where the crop was to be planted).

Jay is now in default of both payments, and Kansas Bank and Mills Feed and Supply are in dispute as to who gets priority over the crop that grew from the seeds Mills Feed and Supply provided. Who will prevail?

1.  Mills Feed and Supply has an agricultural lien that will take priority over the security interest of Kansas Bank.

2. Mills Feed and Supply has a purchase money security interest in the crop that has priority over the conflicting security interest of Kansas Bank.

3.  Kansas Bank's security interest has priority over the agricultural lien of Mills Feed and Supply.

4. Kansas Bank's security interest has priority over the conflicting security interest of Mills Feed and Supply.