Monday, June 15, 2015

The TransparenSeed Project...

Like many of you, we are engaged in an all-out effort to get our costs down to survive <$3 corn. Hope your efforts are going better than ours, BTW.

A few weeks ago, a brief Twitter exchange tipped us off to one area where we might find some savings: seed. Reportedly, it seems like Aaron and I now hold a record for paying the most for seed corn. In fact, we may have paid ~ $80 more for the same hybrid compared to producers 100 miles away.

Very important: this is not the fault of the seed company. It is our fault. Recall the maxim of American capitalism: "It is immoral to allow a sucker to keep his money."

We are anxious not to repeat this feat in 2016, so what can we do?

I think the answer is the tried and true efficiency-booster for any market - transparency and more symmetrical information. Seed companies have amassed significant data on my buying habits and what I will pay. They are employing sophisticated market quantitative analysis as well. They also know what competitors are doing. We have nothing besides vague verbal comments among acquaintances to verify our analysis.

I have pondered long and hard on this one and do not see why seed prices need to be cloaked in conspiratorial pricing. After all, other inputs can at least be roughly comparison-shopped.

Why don't we share what we pay for seed? My conjectures include 1) we never have, 2) we think we are getting the good deal, and 3) we have somehow been led to the belief it just isn't done by upstanding farmers 4) ???. It is also not unthinkable that seed company ad dollars have made this a no-go area for ag media. Maybe seed pricing is too explosive to touch.

I honestly don't know. But I think it would be fun to find out.

The Internet has broken open lots of formerly dark markets simply because it's hard to stop a sole actor with sufficient bandwidth. So I hereby announce:

The TransparenSeed© Project

Goal: I will collect and disperse to participants actual, final seed prices paid by producers in a form searchable by area and hybrid. THIS WILL BE DONE IN A MANNER THAT PRESERVES ANONYMITY TO THE PARTICIPANTS (as much as I know how, but I'm sure the NSA will know you got taken on your triple-stack). My hope is to break your hearts first by publishing real prices for 2015 and then this fall have the system worked out so that 2016 pricing quotes can be published in time for it to actually be of some use.  Every step will be done openly and I will work to assure the numbers are legitimate.

Here is how it will work (subject to revision as we learn stuff, of course).
  1. Price information will be accepted from actual invoices redacted to exclude names, addresses (except zip code - see below), exact volumes and final prices (more below) to protect against retaliation or embarrassment (which may be a paranoid fantasy of mine, I'll agree).
  2. Zip codes will be translated into regional abbreviations like Machinery Pete uses: NWIA; ECIL; SWIN; etc.  
  3. Prices will include quoted list price and final, actual producer cost after discounts, but will be rounded slightly to aid anonymity. Volumes will be treated likewise so valid comparisons can be made.
  4. The list will include company, hybrid number and traits.
  5. The results will be available both as a PDF file and Excel and distributed only to those who send in their info. I am aware this could leak to the Intertubes, but that will only happen if it amounts to something due to good participation. I won't do it, but participants may. I hope they don't but who are we kidding?
  6. Every effort will be made to make sure users compare hybrid XXXX RR/Bt/RW with XXXX RR/Bt/RW and not the same number with XXXX RR2/AQ or something. It will make the database a little clunkier, and no promises on my organizing skills. Ditto with payment date and volume discounts.
  1. If you want, create a new email account on Gmail or whatever with a random address like qwerty&  Use the privacy settings to control what name is shown (or not) with the username. I will not be selling or using your email for any purpose other than the TransparenSeed reports. But these days I understand your reluctance to cough up your info, so you can take this optional step to set up a protective account.
  2. Make a copy of your actual, final invoice that clearly shows how much you paid for a bag of XXX seed after all discounts. Explanatory notes in the margin are welcome.
  3. Redact (hide) all identifying information such as name, account number, dealer info,etc. leaving only zip code, hybrid and trait identification, list and final prices. This can be done two ways:
    1. Take a black marker and color out the private info.  (This why is why you need to make a copy first - you may need the original for the IRS)
    2. Scan the document into a PDF file and redact more professionally if you want.
  4. You can skip the redacting if you believe me that I will protect your info. No offense taken if you don't, but I would be crazy to destroy the trust needed to capture enough info to make this work.
  5. Scan the document into a PDF - most inkjets will do this - it's not hard.
  6. If you don't have a scanner or don't use it, try a photo with your phone. You can email it directly, but try the horizontal orientation first to maximize print size. I tried this and it seems to work, although I felt like James Bond in a Soviet lab.
  7. Email the PDF/jpeg/whatever document to:

I will not use emailed text "I only paid $XX for triple stack" reports. It's not I don't believe you, but that just doesn't work in today's environment. Anonymity does weird things to ethics. 

For the record, this is my idea alone, nobody else it to blame, and I'm not going to make any money on it. In fact, there is a faint chance it could become another time-suck like...this blog and tweeting.

I hope to publish timely updates to those who send in their info. In short, it's "pay to play". These reports will be sent to the email from which the info was received, so be sure to add your new account (if you added one) to your mail client.

This whole idea may go down in flames. There may be nothing there to find other than seed is eerily and uniformly expensive. One big issue is deep discounts to very large operators may understandably buy their silence.  Fair enough - don't blame them. This has been my issue with FBFM-type data: under-representation of large farms. But even BTO's can't be sure what other BTO's are getting. 

And I could be talking to myself here. I'll report that as well. There may be tantalizing teases on Twitter (follow @jwphipps) and here on Incoming, but I will not make results generally available except to participants.

Final note: I may be overlooking some really, really important detail about security or accuracy or efficiency that is obvious to you. Add it to the comments and we can make this a kind of Wiki-Seed effort. 


Tony Geinzer said...

John, all joking aside, I wonder if some of us in the public has issues in telling who is a Longhorn or Rattlesnake? It would be great if your project came off the ground, because if more people did farm work vs. speculate and try to finance, it would look rosier in 2018.

Anonymous said...

I'm in.
S. H.