Down on the farm, B2B-commerce is building up and becoming more of a fixture. That’s because what started as a business information and analytics hub for farmers is now becoming more of an e-commerce operation for Farmers Business Network Inc.
Farmers Business Network, or FBN, launched in 2014 as an information and data analysis portal to help farmers run their operations more efficiently and profitably, says co-founder and vice president Charles Baron. In an age of consolidation among big agribusiness companies—such as Bayer’s $66 billion deal to acquire Monsanto, one of the biggest agrochemical and agricultural biotechnology companies; the $166 billion merger of Dow and DuPont in September 2017 and the $36 billion January 2018 merger of potash and nitrogen fertilizer producers Potash Corp. and Agrium—Farmers Business Network set out to fill a critical information void, Baron says.
Running a farm has always been a challenge for reasons of weather, fluctuating commodity prices, international market dynamics, government red tape and tariffs, to name a few. But today the nation’s 2.1 million mostly independent farmers are operating their businesses in a sustained period of rising costs, lower commodity prices and stagnant or declining farm income. “Farmers are getting squeezed on both sides,” Baron says.
Baron, a former manager of energy innovation and geothermal projects at Google, and FBN CEO Amol Deshpande, who’s a former partner at investment firm Kleiner Perkins Caulfield & Byers, an FBN investor, formed Farmers Business Network in much the same way farmers have launched and jointly belonged to cooperatives for a collective effort in storing grain or producing ethanol.
Now, having raised more than $190 million in capital from Kleiner Perkins and such well-known investment firms as Acre Venture Partners, DBL Partners and Google Ventures, FBN is expanding and adding on new services—with the biggest emphasis on B2B e-commerce.
In December, FBN launched FBN Direct as a B2B e-commerce site that lets farmers research, compare prices and place online orders for such products as seed, fertilizer, herbicides, insecticides and fungicides. The e-commerce site lets customers view extensive product details and images, compare products with similar ingredients, and view prices paid by farmers across the country.
Initially the B2B website carried an inventory of about 200 products but has expanded to about 1,200. FBN, which built its database and analytics tools as cloud-based applications using cloud technology from Amazon Web Services, developed its e-commerce system internally.
Now that the e-commerce site is fully developed, FBN is launching private label products it will sell online under the F2F Genetic Network brand, beginning with a line of corn and soybean seeds. “The F2F Genetic Network will use national, transparent pricing, and eliminate the practice of discriminatory regional zone pricing,” says FBN head of seed Ron Wulfkuhle. “By selling direct-to-farm through the FBN Direct e-commerce platform, we will be able to keep seed prices exceptionally low.”
FBN isn’t disclosing many e-commerce metrics including B2B web sales. But buying certain products online and having tools and data to compare farming operations and related agribusiness data online is saving some farmers between $10,000 and $15,000 annually purchasing seed, fertilizer and related products.
For example, a bag of F2F Genetics Network corn seed will sell for $99 on its e-commerce site, compared with bags sold for as much as $400 by a conventional seed distributor, Baron says. “We’re making a very complicated and expensive transaction easier and cheaper,” he says.
Omaha-based Farmers Business Network is on track to generate about $200 million in revenue this year, up nearly 200% from about $72 million in 2017. The company now has about 200 employees and in March expanded operations to Canada.
FBN will continue to provide extensive agricultural data to lure visitors to its website. FBN gives members access to a database representing more than 55 million commercial acres and analytics tools to analyze and compare performance data on such operations as seed performance, agronomic practices, input prices and crop yields. Data analytics let farmers produce performance metrics for major crops including corn, soybeans, wheat, cotton, alfalfa, edible beans, barley, rice, sunflowers, sorghum, popcorn, sugar beets, peas, oats, rye, rapeseed and various orchard crops and fresh market vegetables. And there are more to come. “We’re working to quickly expand our crop coverage,” Baron says.
The agriculture industry throughout history and by its nature has not been a very open market when it comes to providing information on farm input costs, including the cost of seed, fertilizer, herbicides and related products, Baron says. He contends that big seed, fertilizer and farm chemical producers and their distributor networks have mostly been the source of hard-to-find pricing and performance information. “Before they joined us, I had farmers tell me they had to call their seed or fertilizer dealer to ask how they were doing,” Baron says.
To access and use data available from FBN, farmers pay fees ranging from $700 for a one-year subscription to $2,500 for a five-year plan, enabling them to contribute, access and analyze data that helps each member better benchmark their agribusiness performance, Baron says. Today, FBN is growing with a membership of about 7,000 farmers. “We have members that farm a couple of hundred acres to farmers that have 2.5 million acres,” he says.
With a growing membership, database and now e-commerce, FBN has the business base to give farmers an alternative to depending on big agribusiness conglomerates for products, pricing and farm performance information. “Input prices, specifically seed, continue to grow faster than the commodity prices farmers receive,” says Deshpande. “We are looking to reverse this unsustainable trend by fighting for farmer profitability with innovative solutions that give farmers leverage, even if they are unpopular with the industry, or downright contrarian.”
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