startups

Farmers wary of ‘ulterior motive’ for traders’ digital push – Grand Forks Herald


That may be the easy part. The tough part: Persuading wary growers to use it.

Agribusiness giants Archer-Daniels-Midland Co. and Cargill Inc. are asking regulators to approve a joint venture called GrainBridge to help farmers gather and aggregate information on crops and markets. The push comes as startups like Indigo Ag Inc., Grainster Inc. and the Farmers Business Network Inc. have begun offering digital access to growers to help them pinpoint opportunities in specialized crop markets.

Technology is needed, said Jon Bertsch, who grows soybeans, corn and wheat on about 2,500 acres in Hillsboro, N.D. But farmers always wonder if “there is an ulterior motive,” he said by phone. “They want all of our data. Them getting it should be at a premium.”

As a first step. Omaha-based GrainBridge aims to give mainstream growers access to their trading house transactions, along with their contracts, precise cargo weight and payment information. Ultimately, growers in the U.S. and Canada will be able to sell grains on their own schedules, see break-even levels and ascertain risk, the companies have said.

The two companies didn’t disclose terms of the joint venture, but said in a statement they could close on it “in the next few months.”

“The competitive landscape is changing, and ADM and Cargill see that,” said Nick Horob, who owns Harvest Profit, a Fargo-based farm management technology company. “They realize that they need to get a tool in farmers hands that they really like.”

Details on planting, yields and production are “intellectual property,” Horob said. “There is definitely some concern.”

Tim Boring, who grows corn, soybeans, wheat and barley near Lansing, Mich., said the offering may be helpful to farmers seeking a higher comfort level on hedging and locking in profits. Still, “you don’t necessarily know how it could go wrong” when proprietary farm data is placed on a system run by big companies.

Cargill and ADM’s initiative is “an indicator to me that there’s real potential in this space, and they want to be in it somehow,” Boring said, adding that such programs only work “long-term if everybody gets something out of it. For the big boys, they’re not in it just for positive PR.”

The farmer has got to wonder “how do I make sure I’m getting something out of it too,” Boring said. “There’s so much uncertainty. Farmers don’t even know how much their data is worth.”

In a joint response to Bloomberg, Chicago-based ADM and Minneapolis-based Cargill said “GrainBridge will provide a more complete view to farmers of their total grain sales and account information. The technology will be designed to aggregate information for the farmer,” and won’t be shared.

“Only a farmer will see his of her own account information,” the companies said. “Neither Cargill nor ADM, nor any other partner or participant, will have access to any customer’s information that they are not providing themselves.”

Those concerns may be unwarranted because the large companies already have a wave of people watching the market in granular detail around the clock, said Craig Dobbins, an agricultural economics professor at Purdue University in West Lafayette, Ind.

“The whole digitization process has some really earth-shaking potential,” Dobbins said. If there is a new, proven way for farmers to make more money, “they would be quite willing to share data. The foxes have the data already.”

Bertsch, meanwhile, says he’ll give the new system a close look. It could be “huge,” he said. “It’s not like back in the day where, two or three days later, dad or grandpa drives over to the elevator to try and market the crop.”

Now, Bertsch said, we can see “a tweet make a difference in 10 minutes.”

This article was written by Mario Parker, a reporter for Bloomberg.



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.