Startup uses technology to help farmers compare seed prices
HOPE, N.D. — A company with roots in Silicon Valley is trying to shake up the farm economy — and hundreds of farmers in Minnesota and the Dakotas are dipping their toes in the waters.
The Farmers Business Network was born of farmers frustrated with opaque seed and chemical pricing, and tech guys who believe that data is the answer.
Its pitch to farmers is simple: Share your seed and crop data with us, and we’ll help you save money on seed and chemicals — and try to get you a better price on your crops.
That’s an unusual approach for an industry typically known for its opaque pricing. Most of the farm seed and chemical market is controlled by a few huge companies — the newly merged Bayer-Monsanto, Syngenta and others — that closely guard their pricing, which means that farmers don’t always know if they’re getting the best possible deal.
So, starting about four years ago, Farmers Business Network co-founders Charles Baron and Amol Deshpande built a database that compared the prices for seeds and chemicals, with information supplied by the customers themselves. That data got Kerry Baldwin’s attention.
Baldwin is a fourth-generation farmer in eastern North Dakota, near the small town of Hope. For years, he’s purchased fertilizer and chemicals from his local cooperative. But when he looked at the FBN seed database, he saw prices that varied by as much as S100 for the same corn seed with different labels. Seed with the same genetics is often packaged under different names and sold at different prices. Sometimes the same company charges different prices in different locations for the same seed.
“It was amazing to me that there was that much difference in the same seed, just across the state of North Dakota, I thought that was a crazy amount,” Baldwin told Minnesota Public Radio. He decided to pay the $700 annual fee and give FBN a try.
Farmers who join FBN share information about the seed they use, by sending in pictures of seed tags, which helps build the company database. They also share crop yield information, which gives farmers more data they can use to help choose seed varieties.
Last year, Baldwin said, his co-op couldn’t match the fertilizer prices offered by FBN. So he ordered two tanker truck-loads of fertilizer delivered to his farm, saving himself thousands of dollars. This year, his co-op has a new supplier and offered a better price, so he’s buying fertilizer locally for next spring. But he’s still ordering pesticides for the next growing season from the FBN website.
“When we placed our order, there was one chemical where I think I saved $140 a gallon. You know, that was close to $4,000,” said Baldwin, who also likes the financing: Zero percent interest until next December. That means he won’t need to borrow as much money from a bank at 4 to 5 percent interest.
Baldwin is one of more than 500 North Dakota farmers signed up with Farmers Business Network. The company says it has nearly 750 members in Minnesota and about 7,500 across the U.S. and Canada, still a small fraction of the farm market. For context, there are about 2 million farms in the U.S., according to the U.S. Department of Agriculture.
Zach Johnson, a fifth-generation farmer near Alexandria who also runs a popular YouTube channel on his life as a millennial farmer, recently signed up because he was curious. He was surprised by the disparities in what traditional companies charge for the same seed.
“I believe there’s definitely been a lot of secrets and a lot of things that they have not been transparent about,” he said. “Stuff that would have been useful information to us. And I think that, at this point, it’s become obvious that they’ve kept a lot of secrets and they sort of kept us out of the loop on that.”
Johnson isn’t sure if he will buy seed directly from FBN, but he said he will use the price information as leverage with his local supplier.
“I’ll be completely up front with him and say, ‘Look, I know that I can get the same exact seed down the road for cheaper, and no hard feelings if you can’t match that price, but I’ll give you the chance to match it right now,’” he said. “And you know if you can’t do it, I’m usually a pretty loyal guy, but at some point business is business.”