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Corn+Soybean Digest

Vendors as Partners


To build a competitive advantage, we can learn from other farmers through peer networks, but there is a ready resource that often goes underutilized – our suppliers. We typically think of them in a transactional way, but with the right relationship, we can access more expertise, experience and ideas than ever before.

It’s easy to get into an almost adversarial relationship with our vendors. We look at our expenses and see the suppliers as the problem. So we go into “beat ’em up” mode and start the race to the bottom. Shifting the focus from cutting costs to increasing profitability helps us to select and engage suppliers in a very different way.

One of our clients shared how he’s done this. He is passionate about mastering crop production but also wants a well-run farm business. As he worked to improve his operation, he quickly saw the need for expertise he didn’t have. He decided to put his suppliers to work in a new way – as a board of directors or board of advisors.

At least twice a year, the farmer invites a group of his trusted suppliers from all aspects of the farm (banking, insurance, marketing, fertilizer and seed) to discuss the opportunities and threats that need to be considered. The meeting is open, casual and designed to help prepare for the future. It’s also a forum for banter and debate among suppliers who may not share the same opinions. This helps the farmer think about his business in a new way and see the performance of the people who are working to be key suppliers.

The suppliers that shine in this type of an environment certainly aren’t the ones that only have a volume discount to sell. The strongest retailers demonstrate:

  • Passion to understand clients’ business goals and challenges.
  • Great expertise and understanding of how to fit into the farm’s “system.”
  • Perspective of the future consequences of decisions a farmer will make.

The meeting should include long-term trusted suppliers and people who work to earn the farm’s business. Expectations are laid out, including supplier roles as well as information confidentiality. Consider having everyone sign a non-disclosure agreement. The goals and the business plan are shared, along with challenges that need to be addressed. After the meeting, this farmer has a better understanding of the actions he needs to take and a clearer picture of which suppliers bring value.

Assignment: Pick a supplier that you have a good relationship with that you think could add more value. Prepare some of your goals and challenges and have a different kind of meeting. Pick their brains, learn from them. If the approach works for you, you can begin scaling up the size of your board of advisors. 

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