Podcast: Transparency as a Driver of Market Transformation with Dr. Kevin McNew
In this special episode of the podcast, FBN chief economist Dr. Kevin McNew is taking us on a deep dive into ways that FBN is shaping the new farm economy through transparency, whether that’s transparency in pricing, or industry practices, or transparency in performance. This is a part of our mission at FBN, and we believe that greater transparency is one of the key ways that you as farmers are able to level the playing field and ensure the industry is working for you.
Kevin is the brains behind a lot of the market intelligence we produce at FBN. He leads our market intelligence and analytics efforts, in addition to being a driver of new crop marketing product development. Kevin is one of the most well-respected industry experts on cash markets, and he is a frequent speaker risk management, biofuels and new trading techniques.
For more than a decade, he was a professor of economics at the University of Maryland and Montana State University, focusing on commodity markets. So think of today’s episode as your personal lesson on transparency in agriculture, brought to you from the virtual classroom of Dr. Kevin McNew. He’s one of the best there is in the industry when it comes to boiling down complex issues into easy-to-understand concepts.
The power of a farmer-to-farmer network.
A network of farmers can be a powerful, market-transforming driver. That means that every member is now armed with powerful insights they can actually use when they go to make decisions, purchase inputs, and much more. This is fundamentally changing the economic landscape of our farmers by creating transparency, and that, in the end, is how we transform the market to improve your bottom line.
How does data play into the network?
Data is the raw ingredient needed to create those insights for farmers. So, in essence, everything we do hinges on unique farm data contributed by network farmers, which can then be aggregated, anonymized and analyzed—at the end of the day, our goal is to help you make the most profitable decision you can.
Analytics on the farm.
Analytics is the great buzzword in every line of business these days, but really all these fancy terms are just new ways rebrand “statistics”. And the role of statistics is twofold—take some data that you think represents the real world, and then make an educated guess about what will happen next.
The acceleration we are seeing in analytics in ag is because we now have access to more data, easier to acquire, cheaper to crunch, and at the end we can readily deploy useful insights around it. That does not mean we get a “perfect prediction” every time. But what it does mean is we are able to provide more precision about the predictions we make, and with the wealth of data contributed, we are able to answer questions that previously weren’t easy to answer.
Transparency as a driver of market transformation.
If we look at line items from the farmer enterprise budget (chemicals, fertilizer, seed) we see seed has increased the most in percentage terms over the last 20 years. According to USDA, seed costs have increased 281 percent in the past 20 years, while fertilizer costs have increased only 68 percent.
Seed pricing is an example of a lack of transparency due to seed relabeling. Half of the corn and soybean seed in the U.S. is sold under multiple brands. Zone pricing is another example, where prices for seed are different in different regions of the country. So, as part of the FBN mission, data on seed tags and seed invoices have helped farmers better understand these practices and are now well armed to counteract these pricing practices either thru negotiations or in finding alternative seed suppliers like F2F genetics, which does not use Zone pricing and is 100% transparent.
Do you have questions about the FBN network?
About how you can gain more choice, freedom and transparency in your farming business, and make sure the industry is working for you?
Send us your questions at email@example.com.
We'll answer them on the podcast. From seed industry pricing practices to simplifying the ups and downs of the grain markets, we’ll get your questions answered as best we can. It's another way we're putting Farmers First®.