Want to Slash Your Chemical Costs?

December 17, 2015 09:18 AM
 
Want to Slash Your Chemical Costs?

The Silicon Valley farm-data company that is set out to shake things up in the farm-data world is now doing the same for chemical procurement.

Farmers Business Network (FBN) has created a new option called FBN Custom Procurement for farmers to buy chemicals and other farm products direct from manufacturers at what FBN says is 15% to 40% lower than retail. Chemical prices can vary county to county, and many farmers find themselves frustrated with what seems to some to be an unfair system.

Launched 12 months ago, the California-based FBN’s mission is to “democratize farm data” in a farmer-to-farmer network across the country. It is funded in part by Google Ventures.

 “It makes sense to start this program with chemicals, since there’s room for price adjustment,” says Gary Wagner, a farmer in northwestern Minnesota. He, along with many other farmers, says chemical distributors have a lot of power when it comes to pricing, and this may be a way to put more power back in the hands of farmers.

According to Laurence Trebesch, chief operating officer for FBN, the procurement program will be available to FBN members in eight states including Illinois, Indiana, Iowa, Minnesota, Montana, North Dakota, Nebraska and South Dakota. Farmers who participate in the program will pre-order their chemicals for later on-farm delivery.  The group offers a 1.5% discount for payment received before Dec. 31, 2015, and offers 0% financing for purchases over $20,000. If the prices change between point of purchase and time of delivery, FBN guarantees the lowest price and says the company will send reimbursements.

The group works directly with chemical manufacturers and says it passes along the savings. Trebesch says FBN adds a fee to cover processing and delivery, but even with that, he claims the cost for farmers is up to 40% lower than other purchasing options.

This program was started at the request of farmers who wanted more price transparency and fairness in chemical, fertilizer and seed pricing, Trebesch says. FBN is starting with chemicals and will look into seed and fertilizer as resources allow.

This gives farmers the opportunity to save money, but it means the farmers who buy here will need to be knowledgeable about these chemicals. “Most of the time we get working application rates from our local dealer. By buying chemicals this way we may lose some insights into what is working in the growing season,” Wagner says. “Yes, we can save money and this might be a small sacrifice compared to losing or making money this year.”

What do you think about this program farmers a “lowest price guarantee?” Is this something you would try on your farm? Let us know in the comments.

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Comments

 
Spell Check

Jonathan Coster
New Sharon, IA
12/17/2015 10:23 AM
 

  I would love to save money on chemicals for the farm. This definitely would be worth while if I could save around 40%. The trouble now is that companies do not want to lower prices, and the market will not bear what is being charged for all inputs. Anyone with an eye on the bottom line should be interested in this.

 
 
keith
westside, IA
12/17/2015 06:45 PM
 

  The chemical companies's margins might be 5-10%, their cost of operation doesn't drop because of all the overhead in personnel costs! How long do you think us farmers can keep paying your way! I didn't have a problem paying for our inputs when the American farmer was receiving a fair price for our product.

 
 
frank strickland
nichols, SC
12/18/2015 08:12 AM
 

  can you really save that much? better lok at all the cost .if you go this route better have a very good scout /advisor who has time to keep up with all the different chemicals/tank mixes etc. and when you add that cost back in there goes your saving

 
 

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