A Silicon Valley startup is pitting itself against major seed companies, alleging that those companies are price gouging in the Heartland. Farmers Business Networkās stated motive is to help farmers by crunching numbers and providing transparency, but it is positioning itself to become a player in the seed business, too.
In the age of endless comparable-pricing data, row-crop farmers canāt turn to the internet to find who is selling the cheapest seeds, something that can easily cost tens of thousands of dollars for large operations.
This is where Farmers Business Network comes in. Farmers pay FBN between annually, and send in seed invoices and precision ag data like crop yields and crop performance. In return, FBN aggregates membersā information to show how much certain seeds and other inputs, like fertilizer, are selling for all over the country. It also highlights how well crops are growing in particular states or counties.
Large ag companies like John Deere and Bayer already mine some of that data from farmers, though it isnāt clear how all of it is used.
FBN claims one thing is clear from the nearly 8,000 members who farm more than 31 million acres in the U.S. and Canada: There are major discrepancies in ag chemical prices and region-wide fluctuations for seed prices.
FBNās head data scientist Matt Meisner called this āzone pricing,ā where the exact same seeds from a certain parent company were reliably more expensive in high-yield areas like central Illinois and northern Indiana.
āYou know, we expected there to be differences. I think we were surprised at the magnitude and the impact it has on the growers,ā he said.
Harvest Public Media couldnāt independently confirm FBNās claims, as the company wouldnāt provide a statistically significant amount of its membersā seed-pricing data. FBN said it wanted to keep its membersā data secure.
Harvest also reached out to the companies at the top of the seed chain that FBN points to for alleged zone pricing: Bayer, Corteva Agriscience, Syngenta and AgReliant Genetics. Bayer responded in an email without specifically addressing questions about āzone pricing,ā instead generally listing things it offers beyond just seeds and chemicals, like āelite genetics,ā seed treatments and technical support.
āEach year we gather farmer and dealer feedback about our products to understand how we can serve them better,ā Bayer said. āOur goal is to understand grower needs and develop a portfolio of products and solutions that provide greater choices in seeds and traits that deliver with the highest performance and yield potential to support greater farmer profitability.ā
Others, like Corteva and Syngenta, referred Harvest to the American Seed Trade Association, which advocates for seed retailers around the nation.
As it turns out, ASTA also represents Farmers Business Network.
ASTA President and CEO Andy LaVigne said he hadnāt seen FBNās data on zone pricing, but noted that seed pricing is complex. It changes depending on the time of year farmers buy seed, how much they buy and what protection plans they purchase.
That doesnāt fully address FBNās allegations that farmers in specific high-yield regions pay more for the same seed varieties, though.
But trust ā in a local dealer or major seed company ā means something, LaVigne said.
āThat seed company is evaluated by that farmer every single harvest. And if theyāre not delivering, that farmer is going to go somewhere else ā¦ thereās good relationships out there for generations,ā he said.
Farmers have the right to ask their seed companies for more transparency, LaVigne said, āand I think seed companies will be ready to have that conversation. You know, as Iāve talked to them and they realize that as farmers are getting additional information. I guess I donāt see this as that unusual of a situation.ā
The trust issue
Former FBN data scientist Nick Fabina said he wasnāt surprised that the company wouldnāt share member data with Harvest Public Media.
āFBN is very careful with how they handle farmer data because itās just so important to farmers,ā said Fabina, who was with FBN from its launch in 2014 through 2016. āThereās a lot of financial information in there, thereās a lot of personal information.ā
Fabina said that, at the beginning, many of the employees had agriculture backgrounds and farmersā best interests at heart. But the company has grown significantly from the handful of people working in a garage: It now has more than 100 scattered across the United States.
It also has financial backing to the tune of hundreds of millions of dollars from big-name investors like T. Rowe Price, GV (formerly known as Google Ventures) and Temasek Holdings, owned by the government of Singapore.
Plus, FBN is jumping into the business it is trying to disrupt, selling seeds under the brand F2F Genetics Network. It has plans to grow that side of the business, raising questions whether farmers will be able to trust the accuracy of its seed-pricing reports.
Farmer Aaron Phipps has been an FBN member for three years and said he still stands behind the company because he said the information has been solid so far and helps him bargain with his local suppliers.
āThe marketers know everything and we know nothing,ā said Phipps, who farms in eastern Illinois about two miles from the Indiana border. āWeāve got no point of reference when we go into negotiate with suppliers, and say āHey, this is where the marketās at.ā We had no clue.ā
Armed with data from FBN, Phipps said he told his local chemical supplier that he was paying more for some items than FBN showed was average, āand oddly enough, that was the first year that my chemical bill wasnāt 10% to 15% more than I thought it was going to be.ā
As Farmers Business Network continues to expand its membership and offerings, Phipps is concerned that, eventually, it could be bought by one of the major agribusinesses it criticizes.
āBecause then I no longer feel that theyāre independent enough to make good decisions off of,ā he said.
But, he added, if that happens, something will likely replace it.
āI think now that weāve seen what can be done,ā he said, āI think that the genie is out of the bottle and you canāt stuff this toothpaste back in the tube.ā
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