We’re living in a dot.com world. Anyone who watched this year’s Super Bowl saw the evidence, with 17 Internet sites advertising compared to only three last year. Every day more companies go online, and agriculture is no different.
So how does all this affect you? Right now the impact may be minimal, but it won’t be long before you’re conducting most of your business via the Internet.
If the general consumer trend is any indication – $11.2 billion of holiday 1999 sales were conducted online – the Internet business evolution is well underway.
For one agricultural company, the e-business concept has gone from the brainchild of five investors in 1996 to a growing company with 70 employees today. And, that’s just the beginning.
E-Markets is an online marketplace for agriculture. It offers electronic commerce and the exchange of ideas, news and information for anyone involved in agribusiness.
“We started E-Markets because business e-commerce didn’t exist in agriculture," says Kevin Kimle, co-founder and vice president of the Ames, Iowa-based company.
Kimle believes there are a couple key problems in agriculture. One is the way buyers and sellers interact. “There’s a lack of openness and opportunities,” he says.
Another roadblock is the inability or unwillingness to share information from one part of the industry to another. “We saw the Internet as a platform to build an information infrastructure across the industry,” adds Kimle.
E-Markets has three basic hubs: Inputs, grains/processing and livestock/meats. Each hub is made up of the same basic components:
1. Exchange: This includes things like contracts and price discovery, which is the core of E-Markets. The purpose is to help you gain a broader perspective of the market, with information accessible in one place – the Internet.
2. Services: This includes risk management. For example, E-Markets launched a decision-rule contract program that automates contract pricing for grain producers via the Internet. Eventually E-Markets wants to provide services for you to do the same for livestock entities.
3. Content: This includes news, headlines and market information.
“Our plan is to take the three hubs and link them together so that the information flows continuously from the production inputs to the meat counter,” says Kimle.
“We’re trying to create an exchange of information through all levels of the marketplace to occur on the web,” says Dennis DiPietre, pork industry consultant. This includes the ability to buy and sell livestock and meat, crops and grains, and pass the information through the chain instantly.
For instance, if you want to use non-genetically modified feeds, this exchange can provide information on processing the feed, tracking the product through the food chain, identifying and marketing the final meat products.
“Whereas the old way is done with kill sheets that are faxed or mailed, we can assist via the web,” DiPietre continues. “Through this, producers can create a database of how all of their hogs cut and see how they can create a better product.”
Right now, E-Markets is working on two projects in cooperation with the National Pork Producers Council.
The first is the National Swine Database, which will collect data from producers across the country to help establish industry-benchmarking standards. Participants will be able to benchmark their operation’s records against others of similar size.
The other project underway is the National Environmental Database, which involves data compiled from
NPPC’s on-farm odor audits. NPPC is evaluating the results to determine the top environmental challenges you face and whether the industry’s best management practices are working.
E-Markets also is investigating an online exchange between producers and packers that will offer a new way to sell your hogs (and cattle). You would be able to schedule when and where you want to sell your animals; have the option of forward pricing; and be able to analyze related meat quality data.
DiPietre says the company also is considering a project to provide information and track delivery schedules for pork producers with multiple sites. The system would allow companies to communicate news, information and logistics with contract growers.
DiPietre says it could serve as a vehicle to help you report hog prices once mandatory price reporting is implemented later this year. USDA has mandated that mandatory price reporting will be web-based.
Another project for E-Markets involves developing a proprietary set of decision-making tools. This, he explains will provide the tools to help you analyze your operation as well as look at the overall pork and beef industries. You will be able to access USDA resources, run a production-cost analysis, utilize risk-management tools and surf through links to futures prices. E-Markets already has this type of program for corn and soybeans.
Once established, DiPietre explains that you would be able to access some of this information at no cost; for other areas there could be a transaction fee. Regardless of the area, anyone who logs one will have to register for a user name and password.
The analysis program will have a security platform as well. You can allow consultants to access only certain areas of this program’s database. For example, you can let your consulting veterinarian review production data, but not financial data. Or, you can have your financial or nutrition consultant use the certain data files within the application.
“This is the way agriculture is headed, and at a very rapid rate,” says DiPietre about e-business and the Internet. “It offers huge possibilities to reduce costs, improve returns and to improve quality of information that will help producers make decisions.”
DiPietre also anticipates that these kinds of analysis programs will increase the competitive pressure within agriculture. “Those people that learn to use it early and well, will have a competitive advantage,” he says.
These projects are just a glimpse of what’s ahead for agricultural e-business. With E-Markets (and other companies) programs like these and much more are just a mouse click away.