Independent farm supply dealers from across the Prairies are working together to compete with major companies in the fertilizer business.
Ag West Inc., a limited partnership of 33 farm supply dealers, was founded in 1997 to buy farm chemicals, micronutrients and seed for major manufacturers.
Chief executive officer Mike Ingratta said fertilizer is being added to the company’s shopping list because of the commodity’s importance to members.
“The margins on fertilizer are very tight and our partners need to be able to buy in the same volumes as the big companies.”
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Ag West began with seven companies and hopes to soon have partners in British Columbia and Alberta’s Peace River district.
Rick Renwick, of Ren Gro Fertilizer in Milestone, Sask., said his family business has profited from its two- and-a-half year association with other independent dealers.
“It has been getting harder and harder to do business with the big suppliers,” he said.
“They don’t want the little guy. I guess they think it costs too much to service us, but whatever the reason, working together with other independents is what we’ll have to do to get their attention.”
Allan Kroeker, of Terraflex Ag Services in Niverville, Man., said the industry has changed.
“In the past two years we have seen the line companies target our largest farmers, the ones who pay cash,” he said. “It leaves us with the smaller producers or those that need credit or are at higher risk of not being able to pay on time. It changes our portfolio and increases my risk.”
Kroeker fears the smaller independents won’t survive if this situation continues.
“If they are gone, do you think the line companies will be offering the low prices when there is no competition? Even right now, they only offer them to a select few farmers. We have to work together to survive against these guys.”
Ingratta said the group is looking at linking its dealerships with a short wave computer network to manage inventory of collectively purchased material.
“This isn’t a chain. It is more like a co-op, but it isn’t. It is a limited partnership. Each dealership keeps its independence but works together to source products.”
Last week, the company hired Don Bos, formerly manager of Sherritt International’s fertilizer division and of Esso, to develop the new division.
