Valley Ag Faces E-Commerce Disruption Head-On



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By Matthew Grassi, Field Editor for CropLife, CropLife IRON, and PrecisionAg magazines

Much like drones a few years ago, and some of the interesting things Yield Center 360 has put out over the last couple years, it seems that 2018 will go down as the Year of the E-Commerce Platform, barring some unforeseen market development that rocks Ag Tech’s world in the next six months.

What’s that you say? Sure, the current leader in the clubhouse, the ever-controversial Farmers Business Network (FBN), has been frustrating retailers and chemical distribution companies since the halcyon days of 2014 (anybody remember FieldScripts?). However, just over this last year we’ve seen a number of e-commerce-powered platforms for crop inputs come online: AgVend, HarvestPort, CommoditAg, just to name a few. In June, the announcement came that traditional brick-and-mortar retailer Pinnacle (formerly Jimmy Sanders) has already launched its own direct-to-grower platform.

Indeed, if you’re doing anything at all that involves buying or selling crop protection products to farmers (or you’re like us and just trying to keep all of this straight), e-commerce and its implications on the long-term viability of the traditional tri-channel ag distribution network has surely crossed your mind of late.

During a recent jaunt around the Willamette Valley near Salem, OR, with the guys from CropLife No.16-ranked Valley Agronomics (Rupert, ID), I figured what better group to ask their thoughts on e-commerce in crop input retailing.

“If anything, I believe that some of this e-commerce stuff is actually going to increase the need for the local service provider,” says Connor Lankford, Valley’s precision ag manager. “Even with this younger generation that’s starting to come back to the farm and are starting to run the farm, they want that local advice and they need it. They maybe don’t have quite the same experience that dad or grandpa had after 30-plus years of farming. And I think they question things a little bit more, like ‘Why are we doing it like this, because we do it that way every year?’”

Ethan Parkin, a Valley Agronomics agronomist out of the Rupert, ID, office, agrees that cash-and-carry purchasing will be fine for some growers, but probably not the best option for all. Just as someone who purchases a TV from Amazon can’t go into the transaction expecting a similar level of service as from the local electronics retailer. It’s all about managing expectations.

“Some of our high adoption farmers who understand what the map says or what the data says, that’s fine,” Parkin says of services like FBN and the like. “But our medium-sized growers that don’t have an agronomist on their payroll day-to-day, they need to have somebody who can use these tools with them, not just having to try to figure them out by themselves while they have all these other things in life they need to worry about.”

Parkin’s had the dreaded FBN conversation with some of his growers (FBN has fulfillment operations out of Des Moines, IA, as well as up in/near Montana that ship product to Idaho) and has been able to emphasize the long-term relationship he’s built with many clients to keep them on-board.

“With a lot of my growers it’s ‘Ok, so we’ve got this great relationship that we’ve built with you over the years. Is somebody coming in and just pushing retail ag products going to be able to service you like we do?’ And they understand that, especially in our area where a lot of the customer base is really into loyalty,” he shares.

Parkin characterizes the local crop inputs business in his area as a tight market with six or seven retailers already in the community.

“So, for another one to come in and, even if he has lower prices because he doesn’t have the facilities or the other overhead like some retailers do – like we do – the deal is, can they still service the accounts like we do? I don’t know that’s really there just yet. Maybe they can in the Midwest and that’s why it seems like they’re making a bigger impact there, I’m not sure.”

Valley’s Chief Operating Officer (COO) Richard Lloyd, who worked his way up from account manager at WinField-United to his current standing on the Valley management team, still sees in his day-to-day a grower thirsty for professional agronomy advice.

“I think the growers are a little tired of just being dumped information: data, maps, imagery…I mean, there’s nothing new about that,” Lloyd opines. “There’s obviously things they’re (FBN) getting better at and over time it might get easier to use, but the growers are looking for expertise – instead of sharing them an image, they really want an agronomist that is using technology to efficiently scout, recommend and solve problems. The way we see it, it’s not about selling technology as much as it is about increasing the level of service that we provide the growers, and do it efficiently and effectively with technology.”

This story originally ran in CropLife magazine in June 2018.