Farmers Edge has moved to shore up the company’s leadership and finances following the announcement of co-founder Wade Barnes’s impending departure as chief executive officer.
Four days after the March 25 Barnes announcement, long-time agribusiness leader Rob Meijer, who formerly worked for Cargill Ltd., JBS Foods Canada and Canada Beef Inc., was named executive vice-president of corporate development while Matte Hesse, formerly of Agco and Trimble, was named executive vice-president of global operations.
The company also announced a new line of credit from existing shareholder Fairfax Financial Holdings, with $75 million available to the company for “working capital and general corporate purposes.”
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The moves follow its disappointing fourth quarter results, released the same day as the Barnes announcement was made. The company has struggled to hold onto farmer-clients in its management and digital services.
“We are disappointed in our Elite 2020 conversion rate and have implemented steps to improve our retention rate and (Progressive Grower Program) conversion success by refining our business model, expanding and diversifying the channel partner network, prequalifying customers enrolling in the new PGP programs, and improving operational efficiency and effectiveness,” said Barnes in announcing the quarterly results.
The company continued to lose money in the quarter, suffering a net loss of $19.7 million, for a 2021 net loss of $66.4 million. In 2020, the company lost $84.6 million.
Farmers Edge attracted much investor interest when it became public with an initial public offering completed in March 2021. The company has been perceived by many investors as a likely winner in digital agricultural management services and an avenue into investing in that area.
Farmers Edge describes itself as a “pure play digital agriculture company,” which means investors are putting their money directly into digital agriculture management, as opposed to through the bigger, diversified and not always entirely agricultural companies that also compete with similar services.
Farmers Edge is the most visible proponent of variable rate technology application in Western Canada and it extended its reach into the United States, as well as into Russia and Ukraine. Before the Ukraine war, Farmers Edge was already getting out of its operations in those countries.
In recent years it has been widening the capabilities of its management platform so it can offer much more than variable rate management.
The progress, however, has been much less than hoped for by some investors and the company’s share price has slumped since the IPO, falling from $18.80 after going public to $3.13 on April 4.
Farmer opinions on Farmers Edge services are a mix, with some clients enthusiastic and saying they see solid benefits from the management gains possible through the company’s systems and offerings, while others think the gains, if any, haven’t been worth the costs and complications.
Creating a centralized system that can be used by farmers to manage diverse elements of farm production and financing is seen as a “holy grail” goal that could give winners a product with lasting value, as has happened with other dominant digital platforms in various industries.
Rather than using multiple platforms to manage different functions, consumers and commercial operators have shown a marked preference for single, easy-to-use apps, platforms and programs that simplify management.
Barnes has been closely connected to the Farmers Edge brand since its birth in Pilot Mound, Man. He has been an enthusiastic proponent of the company, its approach and its platform, with grassroots knowledge of farmers, agronomy and farm management. He plans to stay involved with Farmers Edge to “execute its previously announced strategic initiatives and ensure a smooth transition over the next couple of months,” according to the March 25 announcement.
The addition of the new high-profile executives is likely to reassure investors in the company as signs of confidence in its future.
“I am eager and highly optimistic about this tremendous opportunity with Farmers Edge,” said Meijer as his appointment was announced.
“The confidence of our global food supply starts with farmers and is enhanced through trusted partnerships in the steps towards the consumer.”
