Growers tell why they do - and don't - buy over the 'NET
Internet purchases will save Plainview, TX, cotton grower Jerry Brightbill up to $50,000 in chemical costs this year, he estimates.
"I save as much as 50% by buying chemicals over the Internet," he says. "Sometimes it may be as little as 6-7%, but if I can save $1,600 with a phone call, why not?"
Buying crop chemicals off the Internet is just one way Brightbill is using new technology to farm his 4,200 acres of irrigated cotton more efficiently. "With no-till and Roundup Ready cotton we're doing a lot more with a lot less than we did even a few years ago," he says. "We control our pivots from the office and we've got GPS on our tractors and sprayers. Our goal is to micro-manage to save costs."
Brightbill wasn't sure that would be the case when he ordered his first chemicals online. "I thought 'there goes my money' when I wrote the check," he says. "But now I think the system is laid out pretty good. I don't hesitate to order off the Internet."
The prices he finds there, however, give some of Brightbill's local dealers pause. "If they can match the price, I'll still buy locally. But sometimes they just scratch their heads. They can't figure out where these prices are coming from."
Online sales have exposed chemical company pricing policies, according to Brightbill. "One day a dealer will tell me a price is below his cost, and the next day he's calling back to tell me he can match it. It's making the chemical companies look like the bad guys."
Fertilizer is the next input Brightbill intends to buy online. "I'm already pricing liquid for this summer. If the price is right, I wouldn't hesitate to buy a transport load," he says.
The Texas farmer is less enthusiastic about buying equipment and parts online, however. The same electronic technology that helps him buy chemicals from distant companies also makes him more reliant on local service for equipment. The electronics that run his equipment require specialized skills that he doesn't have. "I don't need a chemical dealer to tell me what chemicals I should use. I've got a crop consultant to do that," he says. "But I can't live without service from my local machinery dealer."
Online sales favor larger growers, according to Brightbill. "The larger the farm operation, the more applicable it is to buy in pallets," he says. "To really make it work, you have to buy in quantity. Of course, farmers could buy a pallet and split it with others."
Prefers To Buy Locally
One reason Pat Duncanson didn't buy over the Internet this year: He wants to keep his dollars local.
The other? It wouldn't have been any cheaper than buying traditionally, says the Mapleton, MN, grower.
"This year there was no financial incentive to buy our crop protection products on the Web. But maybe we shopped harder. Maybe another producer isn't getting the same deals," he says. Duncanson priced farm inputs locally and on the Internet this spring and couldn't find one product that saved him more than 1%.
"With most of the products, if I was willing to go to two local suppliers, I could buy locally cheaper," he adds.
In his area, Duncanson says, there used to be seven or eight ag suppliers. Now there are only three.
"If we lose any more there will be no competition. And we will be more dependent on Internet sites to provide that competition - for crop protection or seed," he says.
But it's not like he doesn't see a value in this new way of buying and selling.
"In the Dakotas, for example, there may be only one supplier. I think the Internet there can provide a powerful tool to keep things competitive."
He's not ruling out the use of e-commerce in his own operation. Nevertheless, he'd like to see e-commerce companies work hard to give local businesses or dealers some value within their buying systems.
He cites Mary Kay, the cosmetics company, as an example. Customers apparently can order Mary Kay products online, but a local representative gets credit for the order. That person then provides any follow-up or service, if needed.
"I think that model could very well apply to ag," says Duncanson. "I challenge e-commerce companies to figure out how to make partnerships with local suppliers."
Shopping When Convenient
Buying soybean seed at 11 o'clock on a Sunday night was convenient, say Jeff and Brian Borgmeier. And nary a seed salesman was in sight.
Well, actually, their salesman was onsite. DirectAg.com, a relatively new player in the e-commerce world, was the Web site from which the St. Peter, MN, brothers bought their soybean seed this year.
Although the purchase was convenient, that wasn't the main factor in making their first buy over the Internet. Finding that the site sold Stine seed - with the soybean cyst nematode-resistant varieties they wanted - was.
"We were looking for Stine soybeans and didn't know of a dealer nearby," says Jeff. "We'd been on the DirectAg.com site a couple of times and saw that it had Stine. I pulled up some information and we decided to go that route."
One plus from buying their beans that way: not having to deal with salespeople who may be pushy or take up a lot of time, adds Brian.
"It was nice to have a neutral way of buying," he says.
The Borgmeiers, who raise corn and soybeans, didn't expect to get a bargain.
"I think we probably got the same price (compared to traditional buying), but we had a convenience factor. And the seed showed up on our doorstep. It's just another way of buying," says Jeff.
Because it was their first order, the brothers registered, found the varieties they wanted and typed out their order. Then Jeff called DirectAg.com to make sure they'd placed the order correctly.
"I wasn't 100% sure that everything was set. The first time you do anything, you want to talk with people to make sure they've got it," he says.
The order went in just fine and the beans were all planted by May 2.
One thing they'd like to see added to the site they did business with: more varietal information. "Hopefully, they'll soon be able to get some yield data on varieties," suggests Brian. "With a lot of seed companies, it's hard to get good yield data."
The Borgmeiers also use the Internet for news, weather and to get university information. And using it to buy more farm inputs is definitely a possibility.
"We're somewhat isolated and it's a nice way to get expertise that maybe we couldn't get by playing phone tag with people. It takes a lot of the chasing out. And it's another way of price-comparison shopping," Jeff says.
They don't consider Internet purchases as taking away from local businesses, since St. Peter doesn't have many ag suppliers. "We don't feel the need to buy everything locally," adds Jeff.
Likes Personal Service
The logistics of handling large quantities of chemicals is one of the reasons Nehawka, NE, farmer Wade Nutzman has steered away from online purchases.
"Not everyone is equipped with the facilities and storage space to buy product in large quantities. UPS doesn't deliver mini-bulks," he says. "We've tried it in the past when we could get a better price from a dealer farther away. With the freight, time and handling issues, I'm not sure we came out ahead by the time we were done."
As a board member on his local co-op, Nutzman also sees the other side of the chemical purchase coin. "Most farmers still don't mind paying for service. It's nice to have a local person to work with," he says. "Eventually our co-op may develop a two-tier price program - one that includes service and one that doesn't."
While he isn't ready to buy chemicals online, Nutzman uses the Internet regularly to keep up on new products and their labeled uses. And like a lot of other farmers, he does check Web sites for "price discovery."