By David Perry
The system by which we grow and distribute grain is well over a hundred years old. In the early 1900s, with significant urban migration, came the need for an efficient way to transport crops from rural areas to city centers. This led to the development of a commodity system, in which growers brought their harvested grain to silos where it was mixed with their neighbors’. Growers were paid a set price for each bushel, without regard to source, seed, or process by which it was grown. From there, grain was loaded onto railroad cars or steamships and eventually reached consumers, who increasingly purchased food grown hundreds or thousands of miles from where they lived. For a time, this worked well – it fed our nation, and the world.
We’ve maintained this antiquated system, but now growers and consumers are calling for change. Growers’ profit margins are razor thin. Consolidated suppliers have led to increased input prices, so growers today are economically no better off than they were forty years ago. At the same time, consumers are increasingly interested in where their food comes from and how it was produced. They are no longer satisfied to make purchases solely based on price and convenience. Buyers are actively trying to respond, but are unable to consistently and efficiently source ingredients that are grown according to consumer preferences.
Recent technological advances have the potential to respond to the pain points of growers, buyers, and consumers. Farmers are now able to test the quality of their grain, and then store it on-farm to preserve its identity. Increasingly efficient trucks with advanced routing capabilities can bring identity-preserved, high quality grain from farmer to buyer. On top of that, extensive digital and cellular networks allow us to transfer information at an incredible speed and volume. Nearly all the growers I’m meeting across the U.S. have smartphones. They bring these with them into the field, and are constantly sending and receiving updates on their business.
Leveraging these technological capabilities and responding to social and economic trends, we’ve launched Indigo Marketplace, a digital platform for transacting grain. We built Marketplace with the fundamental belief that decommoditizing agriculture is good for everyone. If farmers are growing a commodity crop, there’s little incentive to invest in grain quality or sustainable production methods – they are paid only for quantity. When we directly connect growers and buyers, that all changes. Buyers can specify what they want, and growers earn more for producing it.
On Indigo Marketplace, growers have access to a large network of buyers. They can review top bids for their grain and select whichever works best for them, weighing differences in price, amount, buyer location, and timing. This is done on a simple digital interface, replacing time spent marketing grain over the phone or in-person. Buyers, in turn, are able to source grain over Marketplace with specific characteristics. By sourcing grain grown organically, with less irrigation, or from specific seed varieties, buyers can more effectively deliver on consumer preferences. Having sourced this grain on Indigo Marketplace, buyers will know its origin and can pass this information along to interested consumers as well.
Indigo Marketplace enables buyers who want differentiated grain to buy it directly from the growers who produce it and reduces the supply chain costs for the whole industry. Because growers are paid based on the identity of their crop, Marketplace incentivizes them to invest in the quality and sustainability of their harvest, ultimately better aligning agricultural practices with consumer preferences. With Indigo Marketplace, we are furthering our vision of decommoditizing agriculture to better support grower profitability, environmental sustainability, and consumer health.