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Electronic marketing

Agriculture.com Staff 11/25/2009 @ 8:16am

Joe Foresman compares it to buying airline tickets online. Tamara Kass likens it to online banking.

As senior marketing manager for DuPont's Pioneer Hi-Bred, Foresman is finding a lot of interest in the company's MarketPoint resource, a secure website that allows farmers to sell corn online to buyers of their choice, in some cases in overnight trading. Kass heads DTN's Marketspace, which allows farmers to make offers to sell for corn, soybeans, and other crops to either one buyer or a group of buyers. DTN, as the back end of many elevator websites, also provides the online marketing service, Grain Portal, that is used by many of those buyers.

Pioneer's service has been going for about a year. DTN's service, introduced for elevators in 2003 and for farmers in February 2008, now has nearly 30,000 farmers signed up for either Marketspace or Grain Portal, Kass says. Some 1,000 grain buyers use DTN's system. MarketPoint, currently available in Iowa and Nebraska, has 10,000 farmers and 350 buyers, Foresman reports. Pioneer is considering rolling out the service in Minnesota, the Dakotas, and the eastern Corn Belt.

Keith Smith, who farms about 1,200 acres near Independence, Iowa, has been pleased with his results on MarketPoint, in a year when the markets haven't always been generous to growers.

Last spring, Smith went online with an offer to F.J. Krob and Company in Rowley, Iowa. He wanted to sell 10,000 bushels of corn for October 1 delivery at $4.09 a bushel, just a little over his break-even price. Corn prices in his northeast Iowa area were running at about $3.50 when he posted the offer online. Then in early June, futures prices rose high enough to trigger the sale.

"We had a week there when we had $4 corn, and it was gone," Smith recalls. "My guess is if I would not have had that offer in there, I wouldn't have sold. When the market goes up, it's easier to wait for it to go higher. You get a little greedy I guess."

Smith sells his crop in increments. After that, the results weren't as spectacular. Still, with less than a year of using the system, he says, "I think I maybe get another 5¢ to 7¢ a bushel doing this."

MarketPoint is set up to allow Smith to make offers to several buyers if he wants. Within 50 miles he has a choice of 34 buyers. But he has chosen to sell mainly to his longtime buyer, Krob. That's partly because he can truck his corn for Krob, delivering it to processors in nearby Cedar Rapids.

Smith likes the way he can make an offer online, then almost forget about it. "The main advantage to me is, if there's a price you want, you can put it out and if the price hits it, it gets sold. Maybe it hits for only five seconds, but if it does, I'm going to get sold," he says.

Joe Foresman compares it to buying airline tickets online. Tamara Kass likens it to online banking.

Others making online offers report a newfound sense of freedom and control with the frustrating job of grain marketing.

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