Leading the pack with FarmLead
FarmLead.com owners Brennan Turner and Alain Goubau pose in the boardroom of their downtown Ottawa office. Vetter photo
by Candice Vetter
AgriNews Staff Writer
OTTAWA — A new company, based in Ottawa and started by two young farmers in two very different farming districts, is providing a new tool which producers can use to buy and sell grains, oilseeds, pulses and forage crops like hay.
It is the first such online tool developed for this particular marketplace, and its concept is so simple it is surprising that no one has developed it sooner. Set up much like Kijiji or a similar online buy-sell database, it allows producers and buyers to post ads, much like classified ads, on the FarmLead.com website. Then the buyers and sellers take over negotiations themselves, once they match up. It is free to register, free to post, and payment is only required if a deal is made. Both parties then pay a commission of $1/tonne for the first 80 tonnes (about two cents per bushel) and $0.25 afterwards. The founders of the business, Brennan Turner and Alain Goubau, say that the price is about 75 per cent less than through traditional grain marketing agencies.
Turner hails from Foam Lake, SK, where his family started farming the land in the 1920s. Turner holds an economics degree from Yale University, played professional hockey and worked as a commodity analyst on Wall Street before starting FarmLead.com. He provides daily expert analyses in the FarmLead Breakfast Brief, available most days about 8 a.m. Eastern time.
Goubau has a dairy and cash crop farm in Lefaivre in Eastern Ontario. His expertise is in building successful startups. He also conducted global agriculture strategy projects and brought his extensive project management and operational experience as a field engineer to projects throughout Europe and Asia. He is fluent in French, English and Spanish, holds a Bachelor of Engineering from McGill University and a Juris Doctorate from Harvard Law School.
FarmLead operates throughout North America and was named one of Canada’s top startups in 2015 and one of Forbes’ most innovative companies in agriculture in 2017. Since starting a mere two years ago, they have hired 30 full-time employees, about 25 in their Ottawa office, which is where the software development and engineering takes place, and which serves as their head office, and the others in their Chicago office, which is the hub of their American operations, and their western office which has customer support. They also bring on interns.
The website works fairly simply, requiring the buyer or seller to enter information in several fields and thereby identify exactly what they are seeking or selling. An advantage in grain marketing, as compared to, say, selling used furniture online, is that grains are very easily classifiable, especially if samples have been tested. Like in other online marketplaces buyers and sellers are rated, and anyone unreliable is quickly weeded out. Buyers go through a strict vetting process, including credit checks, monitoring of posts and verification of identification. Farmers must be transparent about quality, interactions online are recorded, there is a screening process for uploading photos (an option), and buyers must show what they will if they close the deal.
Other fields ask for timing, if it is this year’s crop or a previous year’s, who has to deliver or pick up, the distance within which transportation is feasible, quantity, how it is stored and other pertinent details. “You can decide if you are making sales straight off the field or your own storage,” Turner said during an interview at their head office. He also said, “We’re not interested in disrupting local relationships,” referring to existing buyer-seller networks. Most sellers on the FarmLead website have their grain in their own storage. “We don’t work so much with commercial elevator storage,” said Turner.
Part of the beauty of the system is that producers range in size from 50 acres to 50,000 acres, and buyers range from small individual feedlots to the world’s largest grain buyers. The site is also popular within specialty markets. Besides more common products, crops like spelt or malt barley can be found on the site too.
Turner’s daily analysis is valuable to help producers make decisions when to sell and he draws information worldwide. “We’re not just looking at our own backyards.” Taxes are charged as per local laws.
FarmLead is just about to launch a new feature, which is the ability for farmers to order grain testing online. “It’s not like an auction system or a fixed-price system,” Goubau said, and stated that FarmLead is the only company allowing for negotiation. As Turner explains it, “We’ve successfully replicated that phone call, but it’s like you can make a lot fewer calls.”
Turner and Goubau said they have very little trouble with either their farmers or their buyers, but they do ask that once a sale is made the post is removed quickly. “We are farmers,” said Goubau. “We understand how our customers are trying to optimize their time.”
For more information see FarmLead.com.