Face it, farming is changing. The forces at work on your operation aren’t just the usual grain price squeeze; the pressure goes beyond that to include what consumers want, even for a commodity grain business. And then there’s the uncertainty of production. Growers Edge, a Des Moines, Iowa-based company, is working to create opportunity for farmers in new ways.
Recently, Farm Progress connected with Joe Young, Growers Edge president and chief operating officer, to dig into two major announcements made by the company. The most recent is a partnership with Growmark to develop a yield guarantee program. The second is a collaboration with Sustainable Environmental Consultants to develop sustainability risk management solutions.
A yield guarantee
Just how will your crop do in 2020? What factors are you looking at to get a specific yield and return for every acre you farm? And what if you could guarantee a specific yield for your farm and get a payment beyond crop insurance if you slip.
“This is not an insurance contract,” Young says. “It’s a guarantee, a warranty.”
Under the program, farmers who follow a specific Growmark program of inputs, seed selection and other practices are going to see a guaranteed yield increase. “We think the yield guarantee program will help customers deploy the technologies needed to improve profitability, and we are eager to see it in action,” says Lance Ruppert, Growmark director of agronomy marketing technology.
Young explains that the new program leverages Growmark tools and Growers Edge technology. “We have data from over 1,000 yield trials, reams of data; and coupled with our data, we are confident that we have a baseline showing that growers will receive a benefit or a yield level above what they have historically done [if they follow those practices],” he says.
The system is based on Growmark Product Yield Trials and the Growers Edge Grower Analytic Prediction System, which is an artificial intelligence platform. The two firms have developed a proprietary Agronomic Performance Product specifically for Growmark crop inputs. When farmers follow the specific agronomic practices for the Growmark solutions, they are assured yield improvements, backed by a performance guarantee provided by Growers Edge.
“There’s going to be a 50% return on investment for those who do this and those who don’t,” Young says. “The ROI will be there — and in the event that it’s not, Growers Edge will indemnify it.”
He notes that special weather events, from hail to drought, aren’t part of this deal; that’s for traditional crop insurance. The key is that farmers who invest in the Growmark plan will see a benefit.
Young says more details about the new program with Growmark will be outlined in the coming weeks.
The word “sustainability” is more than being bandied about by big companies these days. Buyers of all manner of inputs for food at the highest levels of major companies are being held to a different standard than in the past. Consumers who know little about food production want to know more about where their food comes from, but how do you as a grain farmer make that happen?
Growers Edge has also partnered with Sustainable Environmental Consultants to help create data-driven financial solutions to navigate environmental risk, growing regulations and changing consumer demands.
“We’re trying to improve the return-on-investment for the farmer,” says Young. “We are not a precision technology company; we don’t build sensors. We’re a company working to bring those technologies to market and help get them on the farm — and do it in a way that improves the profit picture for the farmer.”
He notes that in the SEC collaboration, the idea is that the market is changing and consumers want farmers to be more sustainable, and they’re willing to reward the implementation of those sustainable practices. “One of the toughest challenges is getting the grower to [implement those changes],” Young says. “Many of those practices are fairly new ideas, and some of those new approaches cost money.”
Young says Growers Edge wants to help quantify those practices to determine their return to the farmer and ultimately help finance some of those practices for implementation. Based in Des Moines, Iowa, the company is looking to the Midwest for this program.
“For a farmer sitting in Vinton, Iowa, they’re asking, what do you do with cover crops? Are they worthwhile or not?” Young asks. “There are other practice changes that growers are faced with — till or no-till, for example — that are hard to quantify as to whether that was effective or not. Part of our collaboration [with SEC], in fact, does that. Think of it as a scorecard for those practices.”
Under this partnership, the two companies are working to develop a series of scalable programs centered on the food and beverage industry and its agricultural supply system, including:
• transitional financing, to provide support to help farmers move from conventional farming practices to regenerative practices that decrease environmental impact and support sustainable farming initiatives
• commodity regenerative practices performance, which is a plan to benchmark, verify and work on continuous improvement plans for commodity crop farms to prove sustainability and track environmental impact
• environmental impact documentation, to independently validate the environmental impact of regenerative practices implemented as part of the financed initiative
“We want to take the sting out of changing practices,” Young says. “As we continue to expand our financial obligations, we’ll actually fund those transitions, eventually. That way, we can get them on the farm faster.”
For more information about Growers Edge, visit growersedge.com.