ConnectAg will allow customers of a local dealer 24/7 secure access to account lookup, online grain trading and the ability to purchase products online. News and weather will also be offered, says director of marketing John Oakley.

Who they are: AGRIS, a John Deere company, markets back-office business management systems including AGRIS V9 for Windows, launched a year ago. AGRIS systems are used by 1,200 firms at about 4,000 locations. The company will release ConnectAg to customers next spring.

What they've learned: Oakley says AGRIS research shows farmers value technology — and the easier it makes it for them to do business with local dealers, the quicker they'll adapt. “They truly believe hometown expertise adds a lot of value to business transactions. We found that few producers who had sold grain or bought inputs online were dealing with local merchants,” he comments.

He thinks convenience offered by ConnectAg will be a key driver behind its acceptance — if farmers can get access to their own grain contract balances or delivery ticket details and also place an order for feed after regular business hours, they're a lot more likely to see value. “Where some other Internet services seek to take the merchant out of the picture, ConnectAg allows them more leverage to grow business with their key customer base.”

What to expect: Pilot testing of ConnectAg with AGRIS V9 customers is nearing wrap-up. The firm will go into limited release this coming winter and plans to ramp up throughout its market areas during the spring and summer of 2002. Phase one will target ConnectAg integration into AGRIS customers' V9 business management systems. Future plans call for ConnectAg access to other local merchants and other back-office systems.

Cost: ConnectAg offers a suite of products so merchants will have some flexibility in the package they choose and the cost. For more information, call 800/795-7995, or go to www.agris.com.

Rooster.com plans to broaden its product line beyond current e-business center and crop marketing platforms, says national sales manager Mike Etzel.

Who they are: The Minneapolis-based Internet company is owned by eight of the world's largest players in commodities, oil crops, fertilizer, seed, feed and ag chem. The investor group includes Cargill, Cenex Harvest States, DuPont, Bunge, Louis Dreyfuss, ADM, The Andersons and IMC Global.

“As a consortium, however, they are all minority investors in Rooster. And they all realize the adoption process will require a long-term venture,” says Etzel.

What they've learned: “Retailers and suppliers tell us they see efficiencies to be gained from Internet marketing, but are still trying to discover how to add value without scuttling their current business plans. They're not interested in changing customer relationships; they want tools to make life simpler after they get off the phone. Things like online account lookup and agronomic database information. We'll be addressing those demands,” Etzel says.

“Price discovery is the biggest advantage producers see in the Internet. What are your bids and terms? But they still like to talk before they trade,” he adds.

What to expect: Look for more functions for both input and output. Rooster will continue to refine its patent-pending function called Autohedge, launched last June. Autohedge allows split-second delivery of an elevator's hedge order through a futures commodity house directly to Chicago Board of Trade (CBOT) trading pits. “Autohedge eliminates the impact from market fluctuations that can occur during the typical delays between buying and hedging, and also prevents wasting a lot of office time that can be better spent advising customers,” says Rooster crop marketing product manager Chris Nikkel. R.J. O'Brien & Associates is currently the only commodity trading house accessible through Autohedge. Nikkel says Cargill Investor Services (CIS) and other CBOT futures merchants will be functional soon. Autohedge can be activated currently by a producer when a sell transaction is completed on the Rooster.com Web site. Rooster is exploring incorporating elevator phone trades into the current system.

“We expect many elevators will submit the Autohedge order entry on Rooster immediately after the grain trade is negotiated with a grower on the phone. But as more farmers adopt Internet trading, the sell and hedge transactions will both be completed with one click by the seller,” Nikkel explains.

Rooster is also adding other crop marketing functions, including futures contracts and basis-fixed contracts.

Etzel says Rooster's e-business center product is improved. “The name hasn't changed, but we're working on about the seventh version of what we rolled out last May. We've added more multipage functionality, better linking capability and other features as we've received user feedback.”

Cost: A $2,500 setup investment, plus $200/mo. maintenance fee, gets you a Rooster e-business center four-page Web site and several information/weather package options. Simple “point and click” administration makes it easy to enter market bids, product/service ads and local news. Crop marketing functions, including Autohedge, cost another $100/mo. For more information, click on www.rooster.com, or call 952/842-2600.

“One of our early-on assumptions was that retailers would use XSAg.com to move excess inventory. Actually, 95 percent of the sellers are simply attempting to expand sales to help their survival odds,” says XSAg vice president of sales and marketing Scott Peoples. “Our business has grown 400 percent over last year, and we've hit $1 billion in total sales since we went online.”

Who they are: XSAg.com was started in 1998 by 20-year ag chem industry veteran Fulton Breen, to electronically connect growers with traditional sellers of chemicals, seed, animal health products and equipment parts. “We haven't changed our business model, but a lot of retailers are now selling and buying on the site. Thirty percent of the trading is interchannel — distributor to dealer or dealer to dealer,” says Peoples.

What they've learned: Many retailers are reluctant to trade online, and the industry hasn't seen the explosive growth some forecast. “Expectations have adjusted back to reality, but the adoption curve continues. We see more buyers using the computer to lower costs, such as trying to shave a few dollars off the best offer from a supplier. Our ‘name your price’ function is a quick and easy tool for finding 5 to 15 percent or more savings,” Peoples maintains.

What to expect: Fifty farmers are testing a “virtual co-op” XSAg group-buying concept. Members agree to have a group leader post a product price they're willing to pay for a given amount of product. Bidders enter sealed electronic bids at or below the posted price. At the end of a specified bidding window, the low bidder makes delivery to one location for individual pickup. “Group buying isn't new, but we've now made it a formal XSAg service. We see it as an opportunity for farmers to save by volume buying and for retailers to find new markets for truckload sales,” says Peoples.

Cost: Access is free. Buyers pay their accepted bid price through an XSAg escrow account; sellers pay a 3% fee. For more information, go to xsag.com or send an e-mail to, speoples@xsinc.com.

“The Internet is not about buying and selling products directly to a farmer. It's about improving the buying and selling process,” says Robert Vincent, director of sales and client marketing for E-Markets.

Who they are: The Ames, IA-based Internet services firm developed the industry's first online grain contracting application in 1997. “Our DRC pricing tool is now offered to customers at more than 650 elevator locations. DRC usage has increased five-fold during the past year,” says Vincent.

What they've learned: “Anyone who thought automated pricing programs would eliminate the need for one-on-one consulting was mistaken. We've learned farmers will use electronic pricing tools if they aren't too complicated and if they don't have to give up the personal relationship with their local buyer,” Vincent says. Putting the “mechanics” of a program like DRC into the hands of the elevator manager lets them automate pricing according to the grower's ability or desire to take risks, with essentially no day-to-day grower input needed, Vincent explains. Five pricing models range from conservatively selling a set amount of grain each day to a more aggressive strategy of pricing larger amounts of grain during market rallies.

The DRC pricing tool encourages sellers to stick to a strict selling strategy, thus avoiding the urge to hold grain in hopes of a windfall market peak. Elevator managers say DRC gives them the chance to talk through and implement a sophisticated marketing plan with customers without having to make major investments in their IT systems. And, having possession of the grain helps them maintain orderly movement to markets.

What to expect: Vincent anticipates more elevators will market DRC themselves and/or build alliances with other businesses to offer it as a pricing mechanism. “When North Star Commodity Investment Company established agreements with 50 Minnesota elevators to offer a managed grain program using DRC, it marked the first time the pricing tool was used to benefit all parties — producers, local elevators and commodity brokers — in the grain marketing process.”

Also, check out E-Markets' AgContract information management tool for tracking production and movement of identity-preserved (IP) grain. With AgContract, you can capture production information down to the grower and field levels. This data can then flow as the grain moves through the terminal, barge or ship. “With the label and contamination issues we're seeing, it's critical to know everything you can about an IP field and to be able to electronically pass that information on to food processors,” Vincent says.

Cost: Charges vary from transactional fees on a per-bushel basis for the DRC pricing tool to licensing agreements for other E-Markets applications. For more information, go to www.e-markets.com, call 1-800 674-7419, or E-mail Robert.vincent@e-markets.com

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