How much is fair mark up on crop inputs

[uef]

To put a number as a fair mark up is difficult. It all depends. If it can be shipped directly from the manufacturer's warehouse or distribution depot the mark up should include the freight plus some profit. But personally I don't think profit should be significantly higher than the prime lending rate.
If there are other costs they should be covered as well (before profit) but I really think retailers should keep their costs to a minimum. And a lot of them don't do that. For instance if there are more people "working" in the office than actually preparing and loading the product.

Anyway, what I would really like would be to buy direct and cut out all the costs produced by the middle men. It just does not make sense to me. Farmers buying their inputs from retailers is as if GMC would buy their parts at the Canadian Tire store around the corner.

[darren442]

To answer i few of you i have worked in the Ag retail bussiness and i observed some shocking things. And i have seen some things so honest it would make your jaw drop. The farm retail that our father trusted are gone. My one boss told be when i was mixeing fertilizer to always add 50 pounds or so to make up some money as long as the farmer wasn't standing beside me. I know large companies send retailers for 2 week trips in mexico and fishing trips to BC and all at your cost. Retailers try and plan your crops 3-4 years in advance so they can get the best bonuses from the chem companies ( there black box) thats why retailers will push alot of product from one company becuase they are getting more money back from the chem company. It doesn't matter if it is the best product for your crop . And it's true ive seen it and was told to do it. I've talked to most of the crop supply companies out there and they always talk about hidden costs pioneer is bad for hidding costs and so is
co-op. They told me they do it to my face. Co-op sends there guys to a course on how to talk you into buying a products.

If i ever got the oppurtunity i would get 20 farmers to invest $10,000.00 each and open a farm retail that charges 20% markup on everything and for those who invested 10%. And thats it but there are no farm visits no frills but then most of us a smart enough that we don;t need someone in our fields every week. and another thing if your paying over $100 for a soil sample your being charged to much.

I think it's time for a change or maybe wal-mart should get into the crop supply bussiness think about that ???

[darren442]

For those who think i'm blowing steam i had a conversation with two retailers at a table near saskatoon about an agronomist position in the spring and i told them how i thought farmers should be treated. Today i cannot get a job as an agronomist with anybody because they know i disagree with hidden costs jacking fertilizer weights ect.

These two retailers got upset when i told them i have my own fertilizer blending programs that i sit down with farmers and enter in every cost to tweak the per acre value. They said i was crazy if i thought a soil sample ( collection and analysis ) should be only about $90.00 dollars.

And if anybody wants to tweak there fertilizer blends and they can't get there crop supplier to get them to do it email me at 4thefarmer@gmail.com and if your in the saskatoon area i will sit down over coffee and do it as long as you have the price for N,P,K,S and the blending fee cost. I can also do soil sampling i will collect the soil and your farm will send away the sample.

[furrowtickler]

Darren what you say is very true about agribusiness. Most retailers don't have a real grass roots clue on what they "should " be selling. For most it's about programs, I know I have been in the retail side of it for 15 years now. I quit my first job because of the way certain seed companies treated/blended "certified" canola seed. It used to give me a sick feeling.

[darren442]

I guess on the positive side things may be changing. The number of acres out there are not really changing but the number of farmers are. At one time each retail could have 100 farmers but now maybe 50. As time goes on and farms get bigger and the number of farmers get smaller maybe retailers will have to make changes to keep customers.

Once upon a time an most agronomist became your friend because he wanted to now it's apart of the selling technique so that they can talk you into inputs.

[Lifer]

so very close

[ado089]

Darren, If you set up your own retail and sold product to yourself at a 20% markup you would be paying 16.5% more than you are now on average. As a retail manager I've tried to tackle this issue from several different angles. I've gone as far as approaching bigger producers and offering everything at cost and charging them a brokerage fee as opposed to having a margin markup. This seemed like a good idea until the pencil hit the paper and it was realized how little markup there was on products. As long as grain companies are making $20-50/t on your grain they will give you the inputs to keep that grain coming in. It always amazes me how someone will pay a consultant up to $10/ac for his "services" yet they bitch about an extra 20 cents an acre on their chemical or $3/t for fertelizer that their local independent is offering with that same service. Most small retails have a genuine interest in your buisness and your success as a producer. And will offer you their "services" at greatly reduced cost to you than a consultant would offer knowing that your success is their success.

[Lifer]

I like sardines better then red herring. I know you can do it.

[FarmRanger]

but red herring are such a tasty diversion

[Lifer]

Thank you Mr Ranger sir for being the 100th message on makin' it work. I hope it makes you feel special.

[Professional]

Darren, It's not about what you're doing, it's about how you are doing it. You painted every retail with the same brush. If you are a Professional Agrologist you have just breached the code of ethics and can be brought before the Institute if you keep up with your broad spectrum insinuations. As a P.Ag working in retail, it's about agronomics first for the customer and it's about protecting the public. If you had an ethical dilemma with a previous employer it's good that you left. However, keep it professional and between you and them. If you have a great idea that helps agriculture then get it out there in a professional manner.

[darren442]

No i'm not a P.AG i looked at the brochure and threw it in the garbage. Being a Certified Crop Advisor has more standing in my books.

I take it prof you must have a retail.

[GrainBeetle]

cow photo:

[sidvicious02]

ado089, i think you would be very, very hard pressed to find a grain company making $20-50/mt on commodity.