The Future of Farm Trading

by Doug Bairner, CEO of Hectare Agritech

Technology is abundant on the inputs side of farming - precision spraying, drone surveillance, robotic dairy units and gene editing are very well represented in most agritech conversations. What isn't so well discussed is what technology, and specifically online marketplaces, can bring to the business side of farming. Hectare's platforms, SellMyLivestock and Graindex, bring efficiencies of between 6-12% to the output supply chain, by matching buyers and sellers more effectively and with less friction. We brought together a panel from both within agriculture but also from other industries that have undergone a digital marketplace evolution. The objective? To highlight the benefits to both buyers and sellers, as well as addressing some of the common misconceptions of what online trading means in reality. Our panellists were:

Matt Dobbs - Founder and Managing Director of Westpoint Veterinary Group and Farmacy, the online marketplace for animal pharmaceuticals

Vanessa Lenssen - Head of Innovation at carwow, who are revolutionising the way consumers buy new cars

Dave Rose - former Managing Director of Baringa Partners, a £130m turnover management consultancy specialising in energy and commodity market efficiencies and transformation

Andrew Loftus - Commercial Director of Hectare Agritech, who now have over 40,000 users (c30% of UK farms), and have traded over £60m in outputs in the last twelve months, growing at 120% year-on-year

The common conclusions were that online marketplaces bring:

1. Efficiency: quite simply, buying and selling is no longer an onerous chase to find buyers and sellers and means in low margin markets that smart operators can be very competitive and reach much more of their marketplace with less resources

2. Liquidity: goods and services move more quickly, freeing up time and cashflow and new financial instruments and products emerge to solve age-old problems

3. Market knowledge: providing feedback to unsuccessful buyers and sellers on what the market is really looking for means that they can learn and adjust their offering

4. Service: by making pricing more transparent and no longer a source of mistrust, other areas of service become valued and deeper relationships emerge

5. Trust: can be built into the trading system rather than being personal between buyers and sellers, as Hectare’s FarmPay payments service shows

6. Convenience: the busiest time of day on SellMyLivestock is 8-9pm, which suggests that busy livestock farmers value the opportunity to trade at a time and a place of their choosing

Charles Darwin said in On the Origin of Species, “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change.” With 6-12% points of industry efficiency on the line and with transparent digital trading becoming the norm across most industries, we believe the agricultural businesses that embrace online marketplaces will be ones to thrive both now and in the future.