You are here

Wired for marketing

Two years ago, Successful Farming magazine described new ways to market grain electronically online. Some of those ways are still available, and some new players have entered the market. Following are two new websites worth checking out.

1. Growers edge

This website describes itself as a one-stop resource for farmers' business and marketing needs.

Like many marketing websites, it offers weather radar and market commentary, including analysis from Alan Brugler, Stewart-Peterson, and FCStone.

“How we really differentiate ourselves is that the intelligence and the data we provide is very location-specific,” says Growers Edge president Craig Mouchka.

Growers Edge is an investor-owned independent site that provides its services free to farmers. It makes revenue from unobtrusive advertising, says Mouchka, who demonstrated the site earlier this year.

Growers Edge will calculate the best cash price within 200 miles of your farm using real trucking costs.

“We do have a lot of basis intelligence to supplement those cash prices,” says Mouchka. The website has a basis history for more than 4,500 locations going back one to five years, depending on location.

You can change the setting for a shorter distance from your farm. And for large farms, the program allows you to calculate the best cash prices for up to three grain storage locations. If you need more than that, you can set up another free online account.

The program allows you to set profit goals. You can edit input costs, record marketing transactions, and track your profitability by crop and year.

Once your goals are set, you can use a profit analyzer tool to select marketing and insurance strategies, and to run scenarios based upon price and yield fluctuations.

Growers Edge also offers customizable charts, mobile alerts for your phone, and weather data for specific fields.

Mouchka likes to describe the site as a Google for agriculture. Like Google, it's free to the user and it sells ads for revenue. But the advertising is unobtrusive, without pop-ups or banner ads.

The privately owned business was started by investors with a vested interest in agriculture, including members of agribusiness, banking, and farmers. It's not tied to a major agribusiness. Nor does it sell data about farmers using the website, protecting their privacy.

The site provides a 24-hour-a-day discount trading platform for those who want to buy or sell futures online. You have to open a margin account, but you can try a demo for free.

The website also works with several hundred local grain buyers who are offering premium contracts to farmers who sell them grain. It's similar to programs offered by large grain companies, Mouchka says.

Mouchka grew up in Newton, Iowa, and spent his summers working on his grandfather's and uncle's farms. After graduating from Drake University in Des Moines, Iowa, Mouchka worked in agricultural sales.

Later he worked with banks and crop insurance agents in risk management.

Mouchka was surprised that most farmers sell to only a couple of grain-buying locations.

By developing a free website that makes it easier to find a better basis, “I really saw an opportunity to help farmers,” he says.

Growers Edge was incorporated in 2007. By 2010, it had some farmers testing the site. This year it has more than 10,000 farmers using the service, Mouchka says. The company has a staff of about 50 in Des Moines, Iowa.

“In any business, knowing your market and knowing what your product is worth are key aspects of being profitable,” Mouchka says.

2. Dynamic pricing platform

Two years ago, MarketPoint, an online marketing service, was offered by Pioneer Hi-Bred, a DuPont business.

Last summer, Pioneer shifted that service to the Dynamic Pricing Platform (DPP) operated by Farms Technology, LLC. Pioneer bought an equity stake in Farms Technology in 2008 and had already been using Farms Technology to enable overnight futures trading.

“DPP grain desk gives grain merchandisers tools to service customers around the clock, and it provides growers the flexibility to execute cash sales on their crops the entire 17½ hours that commodity markets are in session,” Tonia Carpenter, Pioneer senior marketing manager said when the change was announced in June.

The DPP grain desk offers several improvements over Pioneer's old MarketPoint program, Carpenter says. Before, growers could sell only corn. Now, producers can market that crop as well as soybeans, wheat, and milo. Under MarketPoint, the smallest sale was 5,000 bushels. Depending on the buyer, it can now be as small as 500 bushels.

“It really opens up the ability of growers to trade in soybeans,” Carpenter says.

The grain desk also allows farmers to sell through hedge-to-arrive contracts and basis contracts as well as forward contracts tied to futures.

Being able to sell grain electronically to elevators is one difference between the DPP grain desk and Growers Edge. According to Growers Edge president, Mouchka, farmers must contact the grain buyers directly after checking the basis on that website.

The DPP grain desk may not offer electronic sales with your elevator, however. But the website allows you to enter a potential buyer to be contacted.

The DPP grain desk currently has 52 different buying entities with 344 delivery locations, according to Jason Tatge, CEO of Farms Technology, LLC, in Overland Park, Kansas.

The benefit of the service is almost instantaneous filling of an offer to sell grain if it hits the farmer's desired price.

“Using the DPP with our patented ePit Technology allows the system to place hedge orders automatically on behalf of the commercial buyers using their existing FCM (futures commission merchant) accounts (no need to open a new account to hedge electronically),” Tatge says.

“This ensures that buyers will only buy grain at their basis bid level, and farmers will only sell grain at their desired cash asking price. The DPP uses 17-plus hours per day of futures volatility to bring the two sides together, enabling both to get exactly what they want. The DPP can eliminate slippage entirely, and in these markets, that is a big deal,” he says.

Last summer, Farms Technology and Pioneer also rolled out an app for iPhone and Android smartphone systems that growers can use to track markets.

It allows growers and buyers to do essentially the same marketing on the phone as online. Buyers can offer private bids to any or all customers in their DPP grain desk system and growers can now make offers via their DPP app.

According to both Tatge and Carpenter, grain buyers pay a $250 monthly fee for having Farms Technology set up their website as well as offering online buying and hedging.

Tatge says Farms Technology “charges a 1¢-per-bushel transaction fee only if the farmer's grain is transacted on the system. Some buyers pick up this fee and internalize it (basically as a competitive advantage to use their DPP), while others will subtract it from the farmer's final sale price,” he says.

Read more about

Talk in Marketing

Most Recent Poll

How much are you willing to spend on seed for your 2017 corn crop?