We use the Internet to check the
weather, prices and buy machinery, a couple
farmers asked Dave Layton. When are
we going to use it to market grain?
Layton, who had launched his market
consulting business in southern Alberta in
2003 was already sending his Direct Connections
newsletter by e-mail, with updates
on local crops and markets, and he agreed.
Why not market grain over the Internet?
Layton hired a local website company to
create an eBay for grain. It took the company
about a year to set up the site and get
the bugs out of the live-bidding component,
and they re still revamping it.
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The Direct Ag Services website puts
buyers together with sellers based on price
and delivery terms. Its primary focus is
southern Alberta.
Originally, we designed it to buy and
sell grain and later added the machinery
part, says Layton. Now the machinery
part is more popular.
First you click on the category. There s
everything from barley to combines to post
pounders. Sellers set a starting price, volume
and how much time is left to bid. The
time ticks down, just like eBay. You can
get further information by clicking on the
item and sending questions to the seller.
The actual finalized deal and transaction
occurs off-line.
Registered buyers are notified of offers.
For example, if you request to be notified,
you re instantly emailed when barley is listed.
Layton only charges sellers if a buyer
is found, and the fees depend on selling
price. For equipment, the commissions
varies depending on the value of the sale,
averaging about five per cent. Grain, oil-seeds
and hay are competitive with other
brokers, about one per cent or less of the
value of the volume sold.
The website is just another way for our
customers to access buyers and for buyers
in the area to find things like feed grain,
says Layton. The eBay-like sales of grain
is just another tool not a substitute for
doing a marketing plan, including your cost
of production.
The distance between operations can be
a real disadvantage for a farmer in southern
Alberta, says Layton. Simply connecting
with buyers can be difficult because of the
many miles between operations. Normally,
farmers would call one or two buyers they d
know. This online service gives that farmers
access to many more buyers. says Layton.
As more people in rural areas get high-speed
Internet, Layton thinks websites like
his will become a more integral part of the
farm businesses.
This way we can live in the middle
of nowhere and still make a living for our
families, he says.
Today his business income is split
relatively evenly between the newsletter and
website. Along with commissions, advertising
generates income. Layton works on the
newsletter for a couple of days a week,
manages web requests the rest of the time
and fits in a little farming in between. CG
