Alton Grain First in N.D. to Offer Online Grain Selling Through FarmsTech

By Tracy Sayler

Last spring, Alton Grain Terminal of Hillsboro, N.D., became the first site in North Dakota to begin offering the option of selling grain over the Internet, for producers wanting to deliver grain to Hillsboro.

The service is through Farms Technology (FarmsTech), an online grain marketing service which offers a ‘Dynamic Pricing Platform’ as an online grain procurement tool to electronically connect grain buyers and sellers via the Internet.

Time and convenience are key benefits. Jason Tatge, CEO of FarmsTech, based in Overland Park, Kans., points out that a typical grain producer will call a local grain elevator dozens or even several hundred times a year to check prices, but actually executes only four to six sales transactions per year.  Similarly, buyers must sort through numerous daily price inquiries for various types of grain at various quality and various bids.

This service essentially automates the management burden for both buyers and sellers. The DPP monitors the seller’s asking price, the grain buyer’s local basis, and the live futures price in real time. When these factors match the desired cash price, the DPP executes the sale.

Sellers designate the price they want, how much they want to sell, and when they want to deliver. Sellers are able to set and change their price targets, any time of day or night, a convenience for farmers after business hours.

For buyers, the service creates more firm offers and originates more contracted bushels, helps manage volume of phone calls, and provides electronic documentation of offers and fills.

Tatge says the DPP places the same priority on all offers, large or small, provides email notification of expiring offers, and fills on firm offers, and provides an organized, centralized location to check offers. The service is operated through an existing web browser (such as Internet Explorer or Netscape Navigator); all that is needed by buyers and sellers is a computer and Internet access.

The FarmsTech fee for the service is one cent per bushel, only if a trade/sale is executed, and the fee is charged to the buyer, not the seller. Buyers may choose to internalize the transaction cost, pass it along to the seller, or share the cost with the seller.

Farmers Co-op in Winger, Minn. was the first grain elevator in Minnesota to offer the service for wheat transactions, as well as corn and soybeans. Other buyers in Minnesota using FarmsTech to buy specific grain include Jennie-O, which uses the service in several locations to price corn, and Cenex Harvest States, which is using the service in southern Minnesota to price corn and soybeans.

A map of locations that offer the service can be found on the company’s web site, www.farmstech.com – Click on ‘clients,’ then go to the second page.

In November, FarmsTech gained a major new client – the U.S. Department of Agriculture. USDA awarded a contract for the online marketing of grain stocks owned by the Commodity Credit Corporation (CCC) to FarmsTech.

‘GrainLink’ (www.grainlink.com) is what FarmsTech calls the electronic service that lists CCC grain stocks to global grain buyers.

Candace Thompson, Acting Deputy Administrator for Commodity Operations at USDA’s Farm Service Agency, said CCC’s past sales practice of cataloging, issuing public invitations, and providing sales lists for grain now will be handled electronically. “We believe the new online marketing platform will bring cost savings, optimize market returns, and provide greater efficiencies in general to the grain trade and to the government,” Thompson said.