Seed E-Commerce Growing
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Mitch Thompson doesn't hesitate using e-commerce when he needs something for his Lewiston, Minnesota, farm. The 36-year-old has used the online shopping platform to purchase farm equipment, animal health supplies and other items.
The convenience of clicking a link to view an array of products saves Thompson time and allows him to compare prices. Shopping online for crop inputs was a logical next step.
He turned to the e-commerce platform on the Farmer Business Network (FBN) after hearing favorable comments from other farmers.
FBN is just one of a growing list of companies serving agriculture via e-commerce. Its product line includes crop-protection chemicals and seed, which it began selling for the 2019 season. FBN offers its own brand under the F2F Genetics Network in conventional corn, GT (glyphosate tolerant) soybeans and alfalfa. It also distributes traited corn through Master Farmer, Paloma Seed Enlist E3 soybeans, Wagner Seeds sorghum and Blue River Organic Seed corn and alfalfa.
Initially, Thompson was going to start small, purchasing about 10% of his corn-hybrid needs and the remainder through his local seed dealer. After studying the hybrid performance data aggregated from other FBN member farmers and with a cost savings of nearly 50% per bag, he placed an order for 95% of his corn acres.
"I have total respect for the retail and the dealer side of the seed business. My grandfather was a longtime seed dealer," he points out. "But, at the end of the day, you're in the business to make money, and this was an opportunity to improve my profit potential."
A NEW MODEL
Growers traditionally have purchased seed through local sales reps, retailers and others using a business model where the seed professionals personally call on farmers to explain a company's latest product offerings, make recommendations and then take a grower's order. It is a model based as much on relationships as it is salesmanship.
But, the popularity of e-commerce has transformed how we shop. Farmers included. The ease of buying almost anything from the comfort of your home with a simple click and credit card is too powerful for many to ignore.
"I'm not saying buying seed and other inputs through e-commerce is for everybody," Thompson points out. "But, in this era of technology, and when you factor all the other things we purchase online, you should check it out and see if it's for you."
The industry's top agribusinesses are certainly assessing e-commerce's potential. In an email statement, Bayer says, "We know that farmers' needs are changing, and Bayer prides itself on working with growers in the ways that best meet those needs. With our retail partners, we will continue to explore all options, including e-commerce/online sales, to ensure we can provide exceptional customer experience and value to our growers. No one size will fit every grower, and our intention is to work collaboratively across our partners to best meet the needs of growers in increasingly digital ways."
At Corteva Agriscience, "We are always looking for ways to improve our farmers' experience in complement to our sales team," the company explains in an email statement. "This includes providing digital tools -- such as Granular Insights, the Pioneer App and e-business solutions where they make sense for growers."
A SLOW SHIFT
Companies like FBN, however, aren't likely to become the Amazon of ag anytime soon. The shift to e-commerce for farm inputs lags far behind the volume sold through conventional retailers. It's estimated farmers purchase only 1 to 5% of their seeds, pesticides and fertilizers online. But, there's little doubt input suppliers and companies of all sizes will embrace and grow their online presence in the future.
Jack Cox believes the future is already here. The vice president for global fulfillment and logistics for FBN wants to take the e-commerce lessons he learned working at Amazon, Wayfair and Target, and apply them to ag.
"No doubt we're still early in the adoption of e-commerce in agriculture," he stresses. "But, the power of e-commerce's product assortment, price transparency and convenience, coupled with consistent, reliable delivery direct to the farm will initiate the same sea change that's happened in any number of other industries."
For that tsunami to materialize, FBN is focused on several areas:
-- Data Dive. Farmers are encouraged to voluntarily share information on their fields, cropping practices, yields and more. "We are developing a robust aggregated data set with real farm data to provide growers with greater insights on product performance across a broad geographic area," explains Luiz Beling, FBN U.S. country manager. "Growers can utilize this information at their fingertips to compare products from different companies. It's unbiased data that provides real value to the farmer to help him make seed-buying decisions."
-- Helping Hand. Minnesota farmer Thompson admits he's a low-maintenance, self-service customer when using e-commerce for input purchases. Still, there are times he needs questions answered. FBN uses a sales team and sales reps to either assist farmers over the telephone or through on-farm visits. Community Builders are also available to meet with farmers throughout the year to evaluate the growing crop and respond to inquiries.
-- Logical Logistics. In e-commerce parlance, "the last mile" or delivery experience is where the company interacts with the customer. A consistent, on-time experience is crucial to any e-commerce company's success.
"In agriculture, we are not dropping brown boxes off on someone's porch," Cox says. "It's considerably more complex. The products we're delivering have a direct impact on a farmer's livelihood, and because of that, the stakes are higher."
FBN employs a hub-and-spoke network that encompasses strategically located facilities to store and deliver product. Farmers can choose to pick up their orders or have them delivered free with a minimum $5,000 spend.
Cox sees exponential growth in ag e-commerce happening during the next few years. He predicts the major seed and chemical companies will eventually employ e-commerce as a channel they want to take advantage of, just as consumer companies like Kimberly-Clark and Procter & Gamble did.
"Initially, they looked at Amazon skeptically and didn't know if they wanted to upset their in-store customers by offering their products online," Cox explains. "In ag, the same thing will happen, either by establishing partnerships with companies like FBN or launching their own e-commerce platforms.
"The sky's the limit."
-- Follow Gregg on Twitter @GreggHillyer
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