In 1988, when mega-retailer Wal-Mart was already spread out across 1,200 stores, mainly in the U.S., frequently in rural and semi-rural communities, the executives at the retail giant were feeling a lot like their farming neighbours, struggling with the
realization that information was going to become the lifeblood of their business but not quite sure how to get there. Two facts seemed irreconcilable. Either you could do business in the countryside. Or you could build a centralized, information-based business. You couldn’t do both.
Wal-Mart changed the rules. The company launched the world’s largest privately owned satellite communication system to constantly stream data from its branch operations to its Bentonville, Arkansas headquarters.
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The effect has been a seismic upheaval that’s touched almost every part of the globe — the “just-in-time” revolution. It has enabled Wal-Mart to undercut competitors, virtually eliminating inventory costs, both for itself and its suppliers by using ships and trucks as rolling warehouses.
Now agriculture may be poised for a similar breakthrough as more and more farms get wired for high-speed Internet access and as they adopt new technology like the latest “smart” cell phones and handheld devices like the BlackBerry or iPhone.
For about $100 a month, most Canadian farms can access the same sort of data transmission capabilities that Wal-Mart had to launch a satellite to get.
The result, according to a Winnipeg grain-marketing consultant who is right on the cutting edge of this convergence of information technology and the ag sector, has been nothing short of phenomenal. David Drozd, president and senior market analyst with Ag-Chieve Corporation, says the days are long gone of waiting for news to filter through to the market.
Now, as more and more information shoots out at the speed of light, the average farmer faces a real conundrum — how to make sense of it all.
Seven years ago, when Drozd founded Ag-Chieve with the intention of offering farmers unbiased market analysis in exchange for an annual subscription, there was no shortage of naysayers in the grain trade who told Drozd he was doomed to fail.
“They told me farmers weren’t willing to pay, and that other people had tried it and failed,” Drozd says. “I thought I should ask farmers directly.”
His initial pitch was to a dozen or so farmers he knew personally. All liked the concept — but the crucial question was, of course, would they pay for it?
“Every one of them wrote a cheque,” Drozd says.
Initially Drozd provided the service through regular fax newsletters and calls to clients, expanding to hire more market advisers as the client base grew. Today the company, located at the south end of Winnipeg, employs more than a dozen staffers, including five market advisers.
But as the information flow became larger and faster, Drozd grappled with how to get information to his clients quickly, efficiently and, most importantly, conveniently. Few farmers are able — or inclined — to sit on the phone or in front of a computer all day waiting for the latest market news.
Bill Smith, Ag-Chieve’s chief operating officer, is the man behind Ag-Chieve’s online push. The solution he hit on was a combination of the familiar and the cutting edge. Three times a week Ag-Chieve provides its subscribers with an online market commentary on its website (www.ag-chieve.ca), similar to a market outlook you might expect at a farm meeting. It comes to subscribers with annotated market charts and an audio commentary detailing with what’s happening in the market, along with factors that may affect future direction and suggestions for pricing opportunities.
“In my experience, farmers are among the fastest adopters of new technology, especially when it’s technology that affects their bottom line,” Smith says.
Once that system was up and running, the next step was to harness the power of the near-ubiquitous cellphones that seem to have popped up on the hip of every farmer in the country. Smith says Ag-Chieve’s strategy was to use these devices to allow farmers to sign up for a service that would push market updates out to them whether they were on the road, in a tractor cab or under a truck changing the oil.
“We send out two daily market updates with price summaries and market recommendations,” Smith says. “When we started I initially thought we’d get maybe 20 per cent sign-up, but in two months we’ve seen close to 90 per cent of our clients request them.”
Dustin Gabor, who manages Ag-Chieve’s advisory services, says the farmers he speaks to on a daily basis like the new option because it keeps them abreast of market developments and recommendations in a way that lets them capitalize on opportunities they may have otherwise missed entirely in a fast-moving market, especially when they’re very busy with other aspects of their operations.
He says a common scenario these days is for farmers to get a text update in the field, call in to the market advisers at Ag-Chieve, get a bit more information and understanding, then use their phones to price their crops, all without leaving the cab of their truck or tractor.
Says Gabor, “These phones are like their link to the rest of the world.” CG
