GrainsWest Winter 2021

Winter 2021 Grains West 36 Rezansoff said his members are aware of FBN and others “bypassing” traditional retailers but believes good that good will come from their arrival. The notion that retailers must up their game to stand out and not become irrelevant with price-hungry farmers is ultimately what they need. “We’ve been aware of it and we’ve been watching how they have evolved,” he said. “There’s always going to be disruption in the marketplace, but it’s how the retailer responds. Retailers are recognizing they need to have better connection, utilizing digital platforms to engage farmers. Ag evolves very quickly. We’ve seen it with technology and equipment, seed, the adoption of GMOs. If it works and it works well, farmers gravitate very quickly.” Still, he balks at the possibility a majority of Canadian farmers will join the ranks of digital players overnight. He does, however, concede his members lose a small percentage of farmers each year, which may also be a factor of less overall farmers, increased farm sizes, consolidations, mergers and acquisitions. Since 2000, audited agrichemical warehouses, as tallied by the Agrichemical Warehousing Standards Association, went from 1,821 to 1,317 in Canada, a drop of 504, or 27.7 per cent. However, even though farmers may wish to conduct business with FBN, suppliers may feel differently. The Competition Bureau of Canada is currently investigating allegations of anti-competitive behaviours by BASF, Bayer-Monsanto, Cargill, Corteva, Federated Co-op, Univar Solutions and Winfield for refusal to supply FBN with seeds and crop protection products such as insecticides, fungicides and herbicides or the restriction of that supply. Such anti-trust suits are rare in Canada, and the government has indicated it takes the protection of competition and innovation seriously, including where it may be disruptive to incumbents. There is no end date set for the investigation that began in October 2019, but Staples’s gavel has already swung. “It cost us three years or more in growth,” he said regarding the inability to source products. “We’ve been able to grow quite quickly as it is, but it’s still definitely had an impact. We can only control us. “We have had to seek alternative supply, primarily in the generic space to have products to sell. At this point we have little to no access to branded products because of everyone’s refusal to distribute through FBN.” Staples referenced the company’s March 2018 purchase of a Saskatchewan agri-retailer as evidence of marketplace challenges. “We made an acquisition of Yorkton Distributors in order to give [farmers] some comfort that we are not operating out of the trunk of a car,” he said. Within months of the transaction closing, Staples said supply all but dried up. Bloodied but unbowed, he understands established companies may be threatened by upstarts wedging themselves in between them and the farmer. “There’s been a ton of change,” said Staples of the way farmers conduct business. “There’s been technologies that have been rapidly adopted and, at the same time, the number of players is getting smaller and smaller in number and larger and larger in size. There is increasingly less choice for growers for what they can buy and who they can buy it from. This is why I think FBN or somebody like us was inevitable.” PRODUCER PROGNOSIS FBN isn’t alone in being the only one less than thrilled with shrinking options to conduct business. R.D. McHugh has had enough, too. The grain farmer east of Okotoks said it’s never a yes or no with big companies, there’s always a catch. “If you’re dealing with one of the majors, they’re trying to get you on the program and capture your grain sales, as well,” he said. “It’s tough to know where they lie. If they give you a bit of a break on chem, but take 10 cents off you on the back of the grain, did they do you any favours? I don’t feel I have that pressure with FBN; in fact, the complete opposite. I’m not getting lip service.” The two years he bought from FBN, McHugh estimates he saved more than $20,000 and that figure will rise in 2021. “We are bringing transparency to an industry that has had none.” —Tom Staples FEATURE