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Commodity Crop Marketing Platform Latest Innovation From Farmers Business Network
With its recent launch of the Commodity Crop Marketing platform, Farmers Business Network is once again challenging the status quo.
“Farm profitability is at the core of what we do. But it’s hard to really have a comprehensive solution, from a business standpoint, unless you have support on the crop marketing side,” says Devin Lammers, Head of FBN Commodity Crop Marketing. “We always knew we wanted to support farmers in this realm. Over the last year or so, we’ve made this a bigger focus in terms of going out and getting opinions from farmers and just having a lot of conversations.”
Those conversations revealed that farmers were clamoring for more support.
“They knew they needed to become better marketers, especially in the last few years when margins have been so tight,” he says. “But even before that, they recognized marketing was a crucial aspect of their businesses and requires attention.”
Yet, finding the support they needed proved difficult. “The newsletters they subscribed to or the general information they were relying on wasn’t really doing enough for them,” says Lammers.
While premium services offered extra support, farmers weren’t taking advantage of them because either they weren’t accessible or the price tag was too high.
“Prices ranged from around $6,000 all the way up to $25,000 a year on a per-acre fee basis,” he says. “For a lot of farmers, that is just too cost-prohibitive.”
The FBN Solution
In order to make the grain marketing process simpler, more efficient, transparent, and affordable, FBN has developed the Commodity Crop Marketing platform. Products and services in the lineup include:
- FBN Cash Grain Management. A premium crop marketing advisory service that provides subscribers with a personal grain marketing manager to advise on marketing strategies, provide selling recommendations, and a personalized marketing plan. This service is a flat fee of $2,000 per year.
- FBN Market Intelligence. A subscription content service providing commodity markets news, analysis, and insights through email newsletters, custom reports, webinars, and in-person meetings [included in Cash Grain Management]. The cost is $19 per month or $199 per year.
- FBN Brokerage. A low-cost commodity brokerage account where members can trade on the futures market at significantly lower cost than typical ag brokerages. The cost is as low as $1.50 in commissions per side.
- FBN Cash Contracts. Forward contracts that allow FBN members to take forward positions with more options and flexibility than those that come with traditional contracts. This product varies in price by contract type and duration.
A key component to this platform, says Lammers, is building a network of active advisors to create a full-service advisory experience.
“This allows us to make sure this isn’t passive information that a farmer may or may not absorb or even read,” says Lammers. “This is a person he can call, that he can have face-to-face meetings with, that he can bounce ideas off of, as well as a person who will reach out to keep a farmer proactively up to speed as well as accountable to his marketing plans and marketing goals he set at the beginning of the year.”
With pilots in place and beta programs running over the last few months, it currently has a small team of advisers already based in the field. The company will actively hire more advisers as the program grows.
“Advisers are strategically located, both in the field within broad territories as well as a few dedicated advisers out of our operations headquarters in Sioux Falls,” he explains. “It’s a two-tiered approach to ensure we have a presence in the field to be able to talk with farmers face-to-face, but also support a centralized location to ensure we have broad coverage in every region.”
From its inception, FBN’s goal was to provide better support and services to farmers.
“Certainly, we are trying to challenge the status quo when it comes to that,” Lammers says. “It’s no different on the marketing side. We are trying to challenge how the process works and how farmers are supported with our cash grain management program. We are also trying to change that on the execution side with our cash contracts that are independent and get farmers more optionality as to where they can deliver their grain.”
At the end of the day, FBN is working to make marketing services that are accurate, easy, and fully-accessible to the farm. The new products and services, notes Lammers, are just the tip of the iceberg.
“This is just the start of what we’d like to do on the grain marketing side, and we will continue to talk to and listen to farmers, get their feedback, adjust the offerings as we need to, and then come out with other services and support over time that can drive toward our mission of Farmers First,” he explains.
As the company looks to the future, it’s clear that the agriculture industry will and must become more transparent.
“As the industry becomes more transparent in terms of price and operational infrastructure, that will open up opportunities for farmers,” says Lammers. “It will also, I think, force the industry to adjust a little bit to how that might work. One aspect of that might be enabling farms to become their own elevator and be equipped to manage their risk and find opportunities more effectively on their own.”
The driving force behind that change is technology.
“The traditional model of buying grain is not necessarily a model that is going to be sustainable for the industry long-term,” Lammers says. “Technology is a great tool that can help distill and provide information in a digestible way. It’s also a great way to quickly execute and convey information and do so in a scalable fashion, that is consistent and can be trustworthy.”