Start-Up Spotlight: Ag Exchange Group
When the Canadian Wheat Board, the sole buyer and seller of Canadian wheat and barley, was abolished in August 2012, farmers needed a solution to easily access potential commodity buyers. Buyers also had to find a way to reach a large group of growers in order to meet their buying requirements. In order to meet these new challenges, Ag Exchange Group was formed in 2013.
“Our Commodity Exchange Network, CXN360, allows buyers to generate a search for growers who have specific commodities available. Buyers are then able to select the growers they would like to make an offer to,” says Ag Exchange Group CEO Lyle Ehrmantraut. “The chosen growers will receive a text and email with the details of the offer, and if they like it, they simply enter the amount of grain they would like to sell.”
How it works
This network allows growers to choose their buyers and the best price at any given time. Because the transaction happens in real time, buyers eliminate their risk of overbuying and are able to fill their requirements much faster.
“Before this technology, there was really no viable way to reach out to all of the buyers in the market other than by phone at every location every day, which is virtually impossible,” says Ehrmantraut. “It solves the problem of an inefficient market by creating great transparency, balance of control between buyers and growers, greater choice within the market, and the freedom to manage business remotely.”
This platform not only benefits buyers and growers, but also creates value for consumers. The technology allows them to trace their food supply back to the field it was grown on.
Before forming Ag Exchange Group, Ehrmantraut had already been working in the agriculture industry for over 20 years. He helped Monsanto launch Round Up Ready Canola in the 1990s, worked on weather risk-management products as vice President of IC Group, and joined Cargill in 2009. His years of experience showed him that there was a significant gap between information technology and the agriculture industry, which encouraged him to develop CXN360.
Ehrmantraut describes CXN360 as an online dating site for grain. It matches the attributes that interest both parties and creates a list of potential connections. Those interested can then reach out to each other in a private, yet transparent, manner.
There are three different models of this grain-matching site. An annual grower membership allowing them to only receive bids will cost $500, while receiving bids and sending asks will run $1,000. If growers would like to receive bids, send asks, and manage their inventory on the platform, they will pay between $1,500 and $2,500 a year. Buyers can expect to pay an annual licensing fee.
CXN360 has been on the market in Western Canada since November 2017. The growers utilizing this platform represent more than 5 million acres, while the buyers are from 40% of Canadian Grain Commission licensed buyer locations. The company will be announcing its launch in the U.S. shortly.
About the company
Company: Ag Exchange Group
Founder: Lyle Ehrmantraut
Headquarters: Saskatoon, Saskatchewan
Background: Ehrmantraut launched Ag Exchange Group after the abolishment of the Canadian Wheat Board. His mobile technology connects growers directly with grain buyers.