“What’s the catch?”
A grower in the audience asked the question at the Indigo Wheat Solutions event Aug. 28 and 29, in Dodge City and Wichita, Kansas. And it’s a valid question since farmers are conditioned to be wary of change.
Mike Tweedy is the head of Systems Deployment at Indigo Ag, Inc., and he said when he talks with customers about the Indigo Offer he understands the question.
“Growers have been doing the same thing for decades, even generations,” he said. “We are attempting to decommoditize a commoditized crop.” For farmers more used to adding their grain to the pile along with their neighbors’ grain the notion of capturing value through the Indigo program can be something that takes a while to come around to. But Tweedy said that Indigo’s three company missions are the key to making the system work.
“The things that are very important to us as a company is that growers are profitable, and we provide them the technology to grow crops in a sustainable way, and then we connect growers with buyers so that they can make more off of their crops,” Tweedy said.
In explaining the Indigo Offer, the key point Tweedy wanted farmers to take away is that Indigo is redefining what basis means.
“It should be defined as your transportation costs,” he said. “We provide a fixed transportation cost from the farm to the delivery point and they lock that in at the contract signing.”
Another critical point of the Indigo Offer is that farmers can capture a premium for preserving the identity of their grain. Indigo’s offer utilizes the farmer’s on-farm storage and pays them a premium of 6 cents per month for a guaranteed 3 months.
“We’d like to utilize their bins to preserve the identity of the grain so the buyer knows what exactly they’re going to get versus buying grain off of a pile,” Tweedy said. “So we guarantee them 18 cents for storage, whether we utilize it fully or not.”
Another premium built into the Indigo Offer is for protein.
“Many Kansas growers can produce quality wheat, but they don’t know what protein premium they’re going to get at harvest,” Tweedy said. “Our protein scale starts at 10.5 percent. Knowing how much you’ll receive for protein helps you adjust for inputs to produce that protein. So you can add another shot of nitrogen to get that protein bump and you can factor that into your analysis.”
Tweedy brought up one other important point, and that is if Indigo sees there’s a way to change the offer to improve the system for growers, even if it’s mid-season, they will do so. And they will make that change retroactive to every contract that’s been entered into by every farmer that season.
“If a decision needs to be made in regard to the offer, we error on the side of the grower, even if it’s not to our benefit,” Tweedy said. “If they aren’t happy, then we aren’t achieving our mission.
“You build trust by being trustworthy, do what you’re going to say you’ll do, and then go above that,” he added.
By making growers profitable, producing crops in a sustainable way and connecting growers with buyers, Tweedy said Indigo is working to change ag.
“No other company has that as their mission, and everybody in our company—and it’s a fast-growing company—is aligned behind that mission,” he said. “It’s noble and just and if we do it right and accomplish these goals, we can be that change agent in agriculture.”
Jennifer M. Latzke can be reached at 620-227-1807 or [email protected].
