Crop Input Selling: Return Of The Price List

Crop Input Selling: Return Of The Price List

It was a good 15 years ago, shortly after I first started writing for this esteemed publication, that it all began. But I remember it like it was yesterday.

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Honestly, I felt a bit like I had brought a curse upon our retail audience when I started working here. Among the many lessons I would begin to absorb in those formative months was that a sea change was happening in retail.

Actually, it was more of a one-two punch. The first would prove to be a haymaker — the introduction of Roundup Ready Soybeans and Corn which would, in short order, lead to more than $1 billion in herbicide expenditures by growers to simply disappear. And, of course, to cut a swath down the center of a significant profit generator for the retailer.

The second punch came out of the shadows and landed a nasty body blow. A new Website, XSAg.com, offered a virtual playing field for the buying and selling of crop protection products online. Anyone in agriculture could list a product and price offer online and sell to any other entity.

We, along with many of you, were concerned that the retailer could be disintermediated — a fancier and less draconian way of saying “cut out the middle man” — allowing growers to find product conveniently and at a lower market price.

But the bigger issue became the devil known as “price transparency.” Growers were not really as interested in buying and selling and storing product as they were in printing price lists off the Internet and waving them in their retailer’s faces. Already low margins were about to race to the bottom.

Crop protection manufacturers and the distribution channel eventually figured out how to do battle with the pricing revelations XSAg brought to the market, but it was an unnerving and unhappy time.

So, I should not have been surprised when I got a call from a friend in the market, who alerted me to another upcoming round of pricing sheets and consternation, this time from the data management organization known as Farmers Business Network (FBN).

FBN has been very successful in signing up farmers for its service, which offers to collect a variety of data points on fertility, crop protection, and yield and return to the farmers input recommendations for the season ahead.

However, FBN is also taking that one step further.

The company is actually acting as an input seller, providing price lists of inputs from which growers can purchase crop protection products, and soon, seed. I am hearing from retailers who’s growers are walking in with said price lists and looking for lower prices. Back … To The Future!

Of course the questions are, can orders be changed up to the last minute? Who is servicing these orders if things go awry? These questions don’t seem so important in mid-January, but when circumstances force a change in plans in the heat of battle, it becomes a big deal.

It will be interesting to see how it plays out, but I would bet that retailers who provide robust service and stand firmly behind what they sell will win the day.