Three retailers offer their expertise on selling the business of agronomy during the second panel discussion at the 2018 CAAR Conference.
From left to right:
Agronomy Manager, Veritas Farm Business Management
Veritas is a comprehensive farm management service that addresses the core needs of the progressive farmer, offering expertise in agronomy, technology, precision ag, grain marketing, business management and data.
CEO, Rack Petroleum Ltd. (The Rack)
The Rack is a Saskatchewan-based independent retailer and supplier of bulk fuels. The Rack provides custom application of crop protection products and fertilizer and offers consultation services to increase on-farm profitability.
CEO and Co-founder, Decisive Farming
Decisive Farming was launched in 2011 and focuses on working with growers and farm service providers, including retailers, grain elevators and equipment dealers. Decisive Farming works with approximately 1,400 growers representing 4.3 million acres across Western Canada.
Scott Duesing (Moderator)
Senior Account Manager at CF Industries
Scott Duesing: During the Farmer Panel we heard stories of how the panelists felt a business went above and beyond for them. Does positioning agronomy and showing your customer how it can help them achieve greater yields help you reach the goal of going above and beyond?
Dennis Bulani: We believe that listening to customer concerns is the top priority. As an example, recently in many markets pea foot rot has been a real issue. A lot of the industry will say, “You’ve got foot rot and we really don’t know how to solve the problem. So, I guess we’ll just have to deal with it – spray the crop out and move on or change your rotation.” We believed that there was no solution to that problem, so we implemented a research project to understand why aphanomyces was an issue and discovered a lot of neat things including the fact that liquid trifluralin would suppress it. In my way of thinking, that’s a true solution to a true problem.
Remi Schmaltz: There’s always challenges on the farm and it really just comes down to being open and honest with growers about what’s happening. Really, agronomy is about reviewing and assessing – if they’re spending, depending on their crop, $100 to $200 an acre on crop inputs – how do you help them make better decisions around that?
Aaron Breimer: I find I spend a lot of time, especially with a lot of my larger growers, challenging them and the way they have been farming. In my conversations with them, what almost always comes out is, “They (retailers) just tell me what I want to hear. They’re afraid to challenge me because they might lose the business.”
SD: When it comes to research – what does the grower see as being important and valid?
RS: As Dennis mentioned, a lot of the research we do is driven by our customers. When we work with growers on a problem they’re trying to solve or something we’ve identified with them, the first measure is common sense.
It is really hard to capture good data on the farm. So, it’s about what that farmer experiences and the value of the service you are providing to them. Often, the focus is just on yield when it should also include things like equipment efficiency, manpower and other logistics that can have an even bigger impact on the farm.
DB: In the last 10 years, there’s been a general lack of research coming from the traditional research institutions, probably due to a lack of government funding, more than anything.
When we’re asked questions about how much phosphate to use, for example, quite often when we do literature reviews we’re frustrated to find a phosphate response curve from 1964, which is the most recent one. Recognizing that new hybrid canola varieties are yielding in the 60s to 80s, we feel we need to generate new response curves to reflect the new hybrid varieties and the new technology. We’re trying to generate the data that we feel is missing.
AB: We spend a lot of time helping our customers turn every field into a test plot and we make it easy for them. When it comes to data and research, you can make it easy for them and you can give them actual data at the end for that year end-review. You can go over every field and say, “These are the ones that made money,” and, more importantly, “These are the ones that lost money, and this is what we learned.”
SD: What’s your view on big data and where do you think it helps in positioning growers with agronomy and maybe getting a dollar for that business?
AB: When I first started hearing about big data, 10 or 12 years ago, I said, “This is really cool. This is going to be the future of ag.” But it never seemed to gain the traction that I was expecting. Over the past couple of years, I have started my presentations by asking growers, “Have you heard of big data?” and it’s like there are crickets in the room. Growers have never heard of big data, or if they’ve heard of it, they’re not sure of how it’s going to connect to their operation.
DB: I’ve had a weather station for 10 years that tracks the data hourly on my farm and I can’t say that in 10 years any of that data has made me any money. That weather station has watched it rain too much and not rain at all and I don’t believe that with all that data we are much better at forecasting weather today than we were 10 years ago. I approach it somewhat cautiously – a lot of times, the grower buys the weather station, so he can go brag to his neighbour how he’s technologically advanced and, yet, only 10 per cent of Western Canada has variable rating. Why? Because there hasn’t been a good, conclusive decision on how to take that data and turn it into money.
RS: I think big data on the farm is less applicable. I think the farmer should be focusing on small data, which would be their farm’s data and what’s happening on their farm.
The focus of big data, in terms of data aggregation, is definitely a topic we as an industry should be thinking about. I think the ownership structure around data is an important thing to really understand, as a retail promoting something to your farm client. You should at least be aware of what that product’s data ownership terms are and that if you are promoting a product to your customer, and the customers don’t understand what they’re signing up for, it becomes your problem. Make sure you take a close look at those legal documents – it’s important.
DB: That’s a very good point, Remi. I believe customers can quickly read when somebody is trying to sell something, as opposed to helping them. I think that our farm customers are starting to realize that anybody going after big data on the farm appears to be looking for a silver bullet or a logarithm that they can make money with. We’re going around with a company right now that allows the farmer to share in selling that big data, which may be something that will evolve.
SD: What role do you play in introducing new products to your customers – do you need to do the research first, or do you want to see data from the supplier or manufacturer before recommending that product, or is it buyer-beware?
RS: If you want to be beyond just an order-taker, you need to be providing new things to your clients that show value – bringing new technology to them and helping to educate and support them. That’s a critical piece of what you are as a retail. I think it’s about having an open conversation with the grower, and I think it’s being open and up front and not misleading about your experience with that product.
DB: Initially, when a lot of independent agronomists came onto the market their number one sales pitch was, “We don’t retail fertilizer, so our opinion is unbiased.” Our answer to that is, “Our competitor is going to charge you four dollars an acre. If he screws up, he’s going to lose four dollars an acre. If we screw up, we’re going to lose four dollars an acre, plus we’re going to lose your fertilizer business, your fuel business, your chemical business. Who has more to lose? Who has more incentive to be a good, ethical agronomist?”
As retails, we are inundated for shelf space. The industry wants shelf space for their boron, their copper, their snake oil, whatever else. Our rule of thumb is, if it doesn’t have replicated, peer-reviewed data, it won’t be on our shelf. I can give you many examples, one is a fertilizer called Ametis – they told us that it was a wonderful product, but there was no data. We’ve researched it and have found situations where it has some seriously good merit. Now, we have the data to back it up and our agronomy team has the confidence to say to a grower, “We have replicated research that tells us there’s a 95 per cent chance that if it worked in our research, it will also work on your farm.”
SD: You’ve brought up a product that didn’t have any data, but you researched and now you have data. Are there any other products that you’ve used – maybe at your seed trials – that have surprised you and you’ve thought, “You know, there is an agronomic fit for our growers here”?
DB: There’s been a lot of surprise discoveries. There are many products that have not been on the market, or are on the market and don’t have data, so we have developed products in-house to solve a specific problem.
AB: Quite often, growers will bring us new ideas and concepts they’re hearing about or reading about on Twitter and say, “Have you ever tried this,” or, “What do you think about that?” The list of things that they bring to us seems to keep growing and we’re starting to see a lot of products coming out that muddy the waters with terms like “equivalency” – “My two pounds of boron is equivalent to 15 pounds.” Well, that doesn’t make any sense, so we play a little bit of a devil’s advocate for them and say, “Here are some of the questions that you should be asking.” Having them then be able to do their own research is a huge asset. Because if they bring it to me they know the answer is going to be, “Sounds interesting. Let’s try it on your farm.”
SD: Remi, independent agronomists has been brought up a few times. I know at Decisive, you guys work with some large independents in the Co-operative Retailing System. Do you work with agronomy teams and is there any butting heads when it comes to product recommendations?
RS: It really depends on the capacity and really what the retail is looking to do. Their agronomist is certainly welcome to join in with the discussion that our agronomist is having. We also have retail agronomists using our software platform with their customers directly and we’re not involved at all, and we have retails who say, “We don’t have the team to make variable rate recommendations, we just want you guys to do it and keep us in the loop on what’s going on.” We’re pretty adaptive to what the retail is looking for.
SD: How does a direct-to-farm model jeopardize the trusted advisor relationship?
AB: If you’re the trusted advisor for that grower, in my mind that means you’re on the same team. If you look down the road at the next ag retailer and you say, “They’re my competition,” ask yourself, does your teammate also view it that way? And if they don’t view it that way, then are you really a true partner? How are you going to overcome that? There are things that ag retailers and farmers have in common and challenges we both face. We have government regulations, we have consumer perception – there’s a lot of stuff that we can work to overcome that the direct-to-farm business model is never going to be able to do.
RS: People talk about direct-to-farm like it’s a new business model; it’s been going on for years. Really, selling crop inputs at cost isn’t a business. Now, they’re subsidizing it by buying grain. It’s funny that as they start to build up warehouses and infrastructure, they start to look like the current supply chain!
I think the piece that is going to be a challenge to retailers is their price transparency. I think that’s something to be conscious of – what you price one grower versus another grower. You may have reasons – you spend a whole lot of time with that guy and provide him services – but that doesn’t get taken into account. So, how do you create more value around your agronomy program and the service offering you have? Maybe it’s simple things like you’re going to bundle-in crop scouting – put it as a line item – “Hey, it’s worth five bucks an acre for what we’re doing, but you bought all your chemical and we’re going to rebate it back.” Try to make it more tangible.
SD: Remi, you just touched on something – how do you put a dollar value to your service?
RS: Some of that value comes back to research or showing results that are quantified, but that’s a tricky thing to do – you’re relying on the farmer to collect data, which is a challenge at the best of times. I think it’s about really sitting down, having that year-end review, and having some information to tell the story of what happened. I think when you walk through and tell that story and relive that with the farmer, that’s a lot of the value-creation we see. You’re working with that grower to improve, and weather is a moving target, but by making those tweaks and adjustments along the way, you will have some big successes.
DB: We charge what the market will bear. If you offer a scouting program, does that mean you’re there once a week? Twice a week? Five times? Nine times? That comes up quite often – competitors offering a scouting program for two dollars. If you were to ask me for a good scouting program and you want it to really do a good job, then I believe it’s a nine-dollar program. If the competitors are two and three (dollars), we say, “So be it.” For boots-on-the-ground, I think getting less than four dollars an acre out of an agronomist, you might as well not even be in the game.
AB: When we sit down with our growers, we ask the question, “What do you want? What do you consider successful? How are we going to measure that?” It comes back to defining value. If a farmer’s not going to pay what he says is valuable, it’s not valuable.
In Ontario, we tend to have smaller farm operators – they’re going to be able to scout those fields way more – maybe not as well as I can – but way more often than I can. If they can take on some of those responsibilities, that’s going to get the cost down for them. If they have a hired hand who they feel can do the soil sampling, they might say to me, “Just create the zones and shoot it to my iPhone, I’m going to have my hired hand do it.” It really varies depending on what they want to have and what they’re willing to pay – as Dennis said, it’s what the market is willing to bear.
Your agronomy program is only as good as the agronomist who’s in charge of that acre.
SD: Before we end, is there is one piece of advice that you can give to the retailers here?
RS: I think it’s about creating separation. At my previous family business, DynAgra Corp., as farms became bigger, the bundled-in service became too expensive in terms of what the product was priced at. We worked out the price of the agronomy and it became pay-per-service. Setting expectations with the grower really sets a clear precedent of what they should be receiving and doesn’t set false expectations which is I think sometimes the problem – especially when it’s free.
DB: Your agronomy program is only as good as the agronomist who’s in charge of that acre. An agronomist who’s not as passionate about their career as others, won’t be as successful. My belief is you have to find agronomists who are truly passionate about their career. If the grower can see that, he will stick with you. The issue is keeping that passionate agronomist on staff – I think that’s a challenge for everyone.
AB: The one takeaway that I would share is there are a lot of incredible agronomists in this industry. If you want to consider bundling them in as a freebee, great, but you’re limiting their impact if you are also challenging them to sell. In Ontario, I would say that 80 to 90 per cent of people who have “agronomist” on their business card are not agronomists, they’re sales assistants. Farmers can smell that a mile away. I think if you’re going to go down the agronomy path, make sure you can assign a value to it that the grower agrees on.
Editor’s Note: This discussion has been edited for length and clarity.
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