Research: Can It Be a Dealership’s Business?

Pictured Above: Illinois grain producer, inventor and long-time no-till advocate, Marion Calmer (r) and Mark Truster (l), who leads a team of 3 in-house agronomists for the 7-location Reynolds Farm Equipment (2018 Dealership of the Year) in Indiana, has more than 25 years of independent agronomy experience. The two sat down during the National No-Tillage Conference to discuss the natural intersection — and blurred lines — between agronomic research and equipment sales, along with opportunities for today’s evolving machinery dealer to reduce the risk of assumption based investments by farm customers.

Mark Truster, Managing Agronomist, Reynolds Farm Equipment

Marion Calmer, CEO, Calmer Corn Heads

Mark Truster: Starting out as an independent agronomist in 1986, especially prior to yield monitors, our work was much too subjective because our clients didn’t follow through with the evaluation step that you mentioned. Their satisfaction is what determined whether or not they’d do it again. That was very subjective. The advent of the yield monitor really brought a lot of objectivity to the table. And advances in GIS software have allowed me as an agronomist to dissect yield data and actually create replications in some of the work that you just described. Those innovations have brought us a long way.

But frankly, even in some of the pioneering aspects of agronomy, we’re still seeing way too much subjectivity. I’m encouraging Reynolds Farm Equipment to purchase contract research on some products that we’re going to recommend. Things that will work with my agronomic bias, but then I can take that to my farm customers because it’s on our dime. Then I can definitively say, this created ROI, or it didn’t.

Marion Calmer: Good point. When you get done, you need something that’s authentic.

Truster: Sometimes customers come to me and say “Hey, what about X, Y, Z, product?” And I have to say, “Well, I don’t know.” What I’d love to say is, “In our replicated research it didn’t do anything,” or “It was wonderful.” I’ve yet to see though, in 30 years at this, a silver bullet answer to an agronomic question.

Calmer: You alluded to it; if a dealer works with a farmer, and they study fertilizer, then there’ll be an unbiased opinion when it’s done. That’s one of the secrets here. You can’t have an ulterior motive and expect anybody to believe that intel.

Truster: Purdue University talks a lot about removal-rate fertilization. That’s only a tool to sell fertilizer in my mind. We’re removing tons of fertility from the soil. But the soil is fertility. The soil is a mineral base. There are tens of thousands of pounds of potash in soils. There are 5,000 or so pounds of phosphate in soils. The idea of unlocking the inventory that’s in the soil is a viable thing. Academia is missing it, and I don’t want to be critical, but most of the research is product driven, not true, basic research. That’s unfortunate.

“I’ve yet to see though, in 30 years at this, a silver bullet answer to an agronomic question. I’m pretty well convinced there are no silver bullets…”

Calmer: There’s a lot of opportunity there. That being said, machinery dealers are the ones who are going to have access to strip-till toolbars and other machinery tools to conduct those on-farm experiments. For example, a farmer may not want to spend $100,000 on a strip-till toolbar so they can go home and play around with it on a 1-year learning curve.

Truster: And then decide they don’t like it.

Calmer: Right. If a dealer had a strip-till toolbar set up, the tractor to pull it and the system is calibrated, they get on the farm and conduct small-scale, replicated trials over the course of 3 or 4 years. The dealer works together with that farmer and, not only is the farmer going to take notice, but all the neighbors that drive by, too. They’re going to ask, “What’s going on out there? And who provided the machine?” You’ll generate a lot of curiosity.

That field data can be benchmarked and validated by the dealership. Then, you have the farmer’s neighbors saying, “I saw over on John’s farm that you were doing some strip-tilling. How did that turn out?” Now the dealer has a knowledge base of a farmer who they worked with, and they’ve got a piece of equipment. All of a sudden they’re generating potential new sales that are good for the dealership. They’re definitely good for the farmer, the environment and the dealer.

Truster: This is still a new idea and it takes people out of their comfort zone. I can help facilitate a project like that and make things more comfortable for farmers. But I can’t do it all. We still have techs and salespeople who are going go demo this equipment.

Calmer: Everybody has bought a piece of machinery that didn’t perform as expected. Then we’re sitting with it and trying to move it. We can reduce some of that exposure of cost until we’re doggone sure the equipment works.

Then the dealer and farmer can sit down and do the math. And say, “You know what? I’m getting a 10 bushel yield advantage. I got 1,000 acres of corn. So now I’ve got 10,000 bushels of corn. This piece of machinery’s is going to cost X number of dollars.”

All of the sudden, we can move that farmer out of a potential negative cashflow or a loss situation — and into the black before it’s too late.”

Truster: The bottom line is we must stay in business. I must keep my clients in business. I can’t go on to a moldboard-plowed farm and say, “If you don’t plant cover crops, you’re going to fail,” because I’ll get fired. Then I won’t get any opportunity to help that customer. I’ve learned to straddle the fence.

Calmer: If I’m a dealer looking to get into the research business, it’s got to be profit-based for the farmer. It’s not going to be just about yield. Dealers need to do their homework and make sure that what that customer is doing is moving them from “somewhat profitable” to really “profitable.”

“If I go into my fertilizer dealer, and give them a half a million dollars, I’m just assuming. We can’t afford to keep assuming, both from an environmental point of view and from an economic standpoint, or you won’t be in business…”

Let’s say the farmer wants to research populations. If I’m the dealer, I can help him set up his planter, so he’s got one half of the planter planting 28,000 seeds per acre. The other half planting 34,000 seeds per acre. Then he can yield check that at harvest time. My dealer is on the support team to help me download that data at harvest. The other thing about on-farm research is we’re going to want multiple replications. There’s no doubt about that.

Trials need to run the length of the field. Say I want to check gas mileage in my truck. I’m not going to fill the tank, drive around the block, then come back to the gas station and reload the tank and expect to get accurate information. The larger the sample, the better.

Truster: There are essential protocol parameters that go into the front end as you described. Frankly, I’m not sure the dealership is ever going to pick that up. Our mission is to sell farm machinery. We’re blessed in central Indiana with for-hire contract research companies. That’s the place for the research because it’s a controlled protocol and that’s the business they’re in. We can hire them to do research, and we intend to come to them with the ideas to test.

Calmer: I had a 10,000-acre farmer come up to me at a show and shared his fertilizer bill is $500,000 a year. He wondered out loud if he gets his investment back. Farmers assume there is a profitability concept behind applications of phosphorus and potassium. I’ve learned firsthand what the word “assume” means. But he’ll say “I’ve got so much to do that I don’t have time to do any research.”

As a dealer, my response would be, “In the fall, we’re going to spread 60 feet of fertilizer, leave 60 feet and spread 60 feet. I need 2 hours of your time in the fall to lay out these plots. Then I’ll need 2 hours of your time next fall to accurately collect the data.” I’ve invested 4 hours of time in an expenditure of $500,000 to see what we can learn.

If I go into my fertilizer dealer and give them $500,000, I’m just assuming. We can’t afford to do that, both from an environmental and economic standpoint, or we won’t be in business.

Truster: I find assumption is my competition’s best defense against what we’re trying to do as independent agronomists. They play to the emotion that farmers must spread fertilizer. And if they don’t, they’re not being good stewards.

Calmer: With the dealership-farmer partnership, we could take the assumption out. The dealer gains validity, and improves his reputation. The farmer can say, “I’m 90% confident I’m going to write you a check for this planter.”

I don’t assume something from my dealer. When the dealer shows up in my backyard and says, ‘Let’s talk about buying a new planter.’ It’s not an ulterior motive anymore because I know he sells planters. He’s helping me make a good business decision that’s based on having ROI.

Truster: It will vary and be specific to each dealership. But the dealerships that succeed will have the customer’s best interest as their baseline. I admit we need to be more objective with customers. It needs to be research driven. Our production is so region-specific now, that we need to do more of our own work.

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Research: Can It Be a Dealership’s Business?