Buying power is in your hands like never before—learn to use it
If farmers from just 50 years ago could see what you do today, they would stand in awe. Precision farming maximizes each acre within inches, seeds withstand herbicide and insects, and highly sophisticated machines track yield and moisture in real-time.
Thanks to technology, you have access to more data about your fields than your grandfathers and great-grandfathers could have ever imagined. With this knowledge, you’re changing the way you farm.
As a result, you’re shifting the market in several ways. By planting fewer GMO acres you’re showing the market you’re willing to try something new. Independent seed companies are getting more of your business. Seed companies offer data analytics at the farm level, and a disrupter from Silicon Valley claims it can empower you like never before.
Have you been watching these trends or been a part of them yourself? Learn more about what’s going on in the market to give power to your input decisions for next season.
After feeling the squeeze of a tight farm economy, some farmers are switching to non-GMO or fewer seed traits. In 2015, U.S. GMO corn acres fell for the first time in nearly two decades. The drop likely stems from one of two benefits: lower seed cost or market premiums for non-GMO.
“We’ve seen gradual movement in that direction [toward conventional, non-GMO, products] because farmers want to cut costs,” says Mark Canary, vice president of agronomy for Premier Ag in southeast Indiana. The other reason, he says, is to sell grain to companies such as Consolidated Grain and Barge to fill the niche non-GMO market.
Farm Journal’s 2016 seed and planting survey, conducted April of this year, showed 23% of the 688 farmer respondents planned to reduce seed traits in the 2016 season, and 12% said they would switch to more non-GMO seed to reduce input costs.
Chris Porter, of southeast Missouri, is taking a critical look at all input costs this season. He says he is considering trying new strategies to maintain profit on his farm.
“It’s one of the first things I think about,” says Chris Porter, who raises corn, soybeans, cotton and rice in Essex, Mo. “It’s so much cheaper on the front end.”
Depending on the hybrid or variety and the seed company, you can cut seed price per acre up to half by switching to non-GMO. But savings don’t come without risk. You’ll want to talk with your agronomist about pest pressure in your area. While non-GMO seed might have the cheapest price tag, areas with more insect pressure might need some additional traits.
“It’s a huge trend: Farmers are going away from products with above- and below-ground insect protection to just above-ground,” says Nathan Kizer, seed manager for the South Dakota Wheat Growers Cooperative, which does 90% of its seed business in corn and soybeans. “We’ve seen a 30% drop in [products with] both above- and below-ground protection.”
If you do make the switch to fully-conventional corn you’ll need to be mindful of pests previously controlled by Bt traits. “With non-GMO, we talk about corn borer and cost of insecticide and provide recommendations,” Kizer says.
It might take more trips through your fields to manage non-GMO products if you’re unfamiliar with them or if you’re in an area with insect pressure. Be mindful of what conventional herbicides you can safely spray on fields and have a plan in place in case of significant insect pressure. It’s also valuable to talk to your neighbors and let them know where you have conventional fields so they’re mindful of drift and other herbicide risks.
If you decide to use non-GMO corn or soybeans let your seed representative know early because supplies tend to run out quickly. “When it’s gone it’s gone,” Canary says.
More farmers are trying independently-owned seed companies, causing some to grow at impressive rates. For example, Beck’s Hybrids has expanded into four new states, for a total of nine, in just three years with annual sales increasing at 10% to 20%, according to president Scott Beck.
Beck’s is also growing geographically though acquisition. In 2014, it purchased a plant from DuPont Pioneer in southeast Iowa to further penetrate and support sales in the state.
“Part of what feeds that opportunity is large companies merging; not only from a facility standpoint, but from the personnel side, they let go of really valuable employees,” Beck adds.
Beck’s takes advantage of the relationships those employees have with local farmers to grow their customer base, he says.
Thunder Seed, a regional farmer-owned seed supplier based in Minnesota, is growing, too: it says its corn sales are up 104% year over year.
The 21-year-old company started licensing seed traits about three years ago, and has grown tremendously. Thunder Seed traited seed sales are up 1,467% the past three years, says Matt Gilbertson, Thunder Seed CEO.
A new player in the agricultural data market looks to shake up the way you buy inputs. Farmer’s Business Network (FBN), which started in Silicon Valley by former Google leaders and has offices in Iowa and South Dakota, claims they can offer chemical inputs direct to farmers for 15% to 40% lower than retail prices.
You can join FBN for $500 each year and then enter data from your farm, including yield maps, input information and invoices for products. The information is aggregated to provide a more holistic view of the market.
Yield-conscious Porter uses FBN for data analytics and benchmarking yield and inputs. “I can compare and contrast what I’ve done right or wrong,” he says. He can even see how hybrids or varieties he doesn’t currently plant perform in his area to empower next season’s seed purchase.
In addition to tracking product performance, FBN publishes chemical prices that can be used to compare by location and provider (seed prices are not yet available).
“We believe in price transparency to empower the farmer,” says Kurt Tsuo, manager of FBN procurement services. “This is not simply a pricing tool—we backstop it with our procurement services.”
FBN recently began offering select chemicals during the season. They compare it to on-demand ordering with products delivered to the farmer within three business days of ordering.
Currently, FBN claims to have more than 2,000 members who represent more than 8 million acres. But, if you appreciate your relationship with your retailer or sales rep, FBN claims they can still bring benefits.
“We have lots of customers using FBN procurement just as a negotiation tool,” Tsuo says.
You can see what others are paying for the same chemical inputs in your area and decide if you think you’re receiving a fair price. Armed with this knowledge, you might have more negotiating power.
FBN doesn’t provide scouting or agronomic recommendations. If agronomic support is important to you, you’ll need to find it through your local retailers. This additional support might mean you’re charged a premium for certain inputs. So, if you’re paying more for service from retailers make sure they meet your agronomic needs.
“It’s not all about saving money,” Porter says. “I want to keep my retailers close because I rely on them as much as they rely on me.”
He says shopping around for the best deal on chemical prices has advantages; yet at the same time, his retailers provide support he finds invaluable.
Whether you enjoy your relationship with your retailer or prefer to go without and pay the lowest prices, the massive amount of data you gain can be a powerful decision aid.
“The more information the farmer gets, the better choices they can make,” Gilbertson says.
Access to information will continue to expand as technology continues to march forward and innovators continue to bring new products to market. It’s only a matter of time before others take FBN’s cue and compete with them for your business.
Carefully consider what it could mean for your farm to use non-GMO for cheaper seed or premiums, independent seed companies or data analytics to negotiate prices or benchmark success. Your grandfather and great-grandfather never had access to the technology you do, so use it to make your farm viable for your grandchildren and great-grandchildren.
Farm Journal’s 2016 seed and planting survey, conducted in April, showed farmers are making different choices than in years past.
Take These Questions to Your Retailer
It doesn’t matter if margins are tight or if you’re in for the best year of your career—you want to make sure you’re making the most effective input decisions you can. The next time you speak to your retailer, ask these questions to empower your decisions:
- What herbicides, insecticides and fungicides can I safely use on non-GMO products?
- How much will my yield be affected if I switch to non-GMO?
- Why should I buy from you when you work for a multi-national brand, when I can help out a family business?
- If I can buy my inputs from a company such as Farmer’s Business Network, why do I need you?
- Why are your chemical prices higher than the cooperative down the road or Farmer’s Business Network?