Pictured Above: South Dakota Wheat Growers, a 5,400 farmer member co-op based in Aberdeen, S.D., captures the 2014 Precision Farming Dealer Most Valuable Dealership. From left to right, CEO Dale Locken, Precision Ag Manager Brent Wiesenburger and Sr. Vice President of Agronomy and Corporate Marketing, Stephen Briggs.
As many dealers can attest, surviving in the precision farming business is hard enough, but truly succeeding requires vision, ingenuity and a little luck.
For South Dakota Wheat Growers (now known as Agtegra), a 5,400 farmer member co-operative based in Aberdeen, S.D., precision profitability hinges on selling solutions, not products. It also requires an acute awareness that technology touches almost every aspect of the company’s business, from custom application to agronomic analysis.
One needn’t look beyond the two words underneath Wheat Growers’ logo — ‘Connecting Solutions’ — to understand the importance of collaboration on the success of the retailer’s precision business.
“As a co-op, producers hold us to way different standards than individual entities,” says Brent Wiesenburger, precision ag manager with Wheat Growers. “If a display doesn’t function properly, that threatens $300,000 worth of business on the agronomy side or that customer not bringing his grain to us, all because of one, tiny product not working. It’s a tough animal for us to deal with if products don’t work the way they are supposed to.”
But for nearly 20 years, the 2014 Precision Farming Dealer Most Valuable Dealership has succeeded in connecting customers to technology solutions and continues to progressively grow the business. During the last 3 years alone, Wheat Growers has doubled its overall precision farming revenue from $5.1 million in 2011 to $10.9 million in 2013, with nearly 70% of profits generated through service offerings, including its cornerstone Management Zone-Based technology (MZB) program.
“Ten years ago, I never would have predicted where we’d be today,” Wiesenburger says. “Now, my mindset has shifted to think about what we’re going to be doing 5-10 years from now. That’s the challenging part.”
South Dakota Wheat Growers
Founded: 1923. In 2000, Wheat Growers hired its first full-time, site-specific precision farming specialist
Employees: 580 full-time, 74 seasonal (12 employees dedicated to precision farming hardware sales and service. 60 employees dedicated to crop input precision farming program, Management Zone-Based (MZB) and 54 sales agronomists)
Precision Lines: Ag Leader, Precision Planting, Raven, Trimble
Locations: One precision farming development center in Aberdeen, S.D., in addition to 26 grain and 23 agronomy locations in South Dakota and eastern North Dakota
2013 Precision Revenue Breakdown:
2013 Precision Ag Investment Breakdown:
2013 Total Precision Technician Service:
Total Hours Billed: 4,400
Wiesenburger began his career with Wheat Growers as a custom applicator working out of the Bath Fertilizer location in Aberdeen. In the early 1990s, he noticed increased interest among area farmers in adopting precision farming technology.
“I remember having cutting-edge customers asking when Wheat Growers was going to have this precision service they’ve been hearing about,” Wiesenburger says. “That got me and my then manager thinking about it and we started out purchasing a $24,000 Ashtech Ag Navigator GPS display to put in the cab of an AGCO TerraGator.”
High-end producers began adding GPS monitors to variable-rate fields that had been grid sampled by Wheat Growers’ agronomists, but precision hardware sales were initially slow to take off. With several area farm equipment dealerships also selling precision products to the same customer base, Wheat Growers only sold about $250,000 worth of precision hardware annually in the early 2000s.
“That would be a big year for us and hardware sales were still a pretty small part of the business back then,” Wiesenburger says. “We were going out and supporting a lot of different products and brands. I remember helping producers with pull-type sprayers and getting them going with precision systems they didn’t buy from us.”
What Wheat Growers needed to grow the overall precision business was a way to integrate the information produced by the hardware with the agronomic services offered by the retailer.
Wiesenburger found what they were looking for in 2006 when the co-op partnered with a local company — Management Zone-Based Technologies (MZB) — to provide customized nutrient and planting recommendations to customers, based on yield capacity of a specific zone in the field.
Wheat Growers rapidly grew its precision customer base, thanks in part to the closing of MZB’s parent company, which left behind 40,000 acres worth of MZB zone maps in the co-op’s territory.
“We got the acres and those customers understood they had a resource to draw from as far as hardware so they could do their own applications,” Wiesenburger says. “They began to ask for more equipment and we signed them up for more acres because they knew we could service what we installed.”
The partnership with MZB also shifted the workload for Wiesenburger, who had been essentially a one man precision department. He was named precision ag manager in 2006, and today oversees the entire precision hardware business as well as MZB Technologies and its 6 employees. The 12 precision hardware employees report to location specific managers and the 54 sales agronomists that sell and support the MZB system are split equally among four regional sales managers.
In summer 2013, Wheat Growers held an “Innovation Plot” event at its primary location in Aberdeen, S.D., to simulate planting technology and interact with customers. The first-year event drew 450 attendees, exceeding expectations. Photo courtesy of Wheat Growers
“The MZB decision took a lot of work off of me sitting at the computer doing mapping and allowed me to think about growing the business and focusing on the hardware,” Wiesenburger says. Since 2011, total precision ag parts sales have grown from $1.1 million to $2.8 million in 2012 and $3.5 million in 2013.
Zoning In on Growth
In 2011, Wheat Growers acquired MZB Technologies from founder Glenn Hanson and today, offers tiered service packages for customers. Wiesenburger understands that providing a range of plans increases the chances that more customers will find one that suits their precision needs.
The top tier patented approach starts with a one-time charge of $12.50 per acre for data logging. MZB technicians use Veris EC carts across enrolled acres to collect two layers of data for up to 12 management zones in each field, with each zone having a different yield potential. MZB technicians collect “hundreds of thousands of data points” in the field and also use survey grade GPS to collect elevation data, combined with satellite imagery to create management zones that make sense to the customer.
“If we show a producer his own map and he says, ‘That’s not my field,’ that’s not a zone map we want to be working with,” Wiesenburger says. “Farmers have to recognize that zone map when they look at it. They’ve got to be able to pick out three or four unique features out of that zone map. Then we know we’ve done a good job when we can have that conversation with a customer.”
What the Judges Say ...
“Wheat Growers stood out as a progressive operation coordinating sales, service and data management, which is different than a lot of companies today.”
“They are a service-based organization, rather that just a seller of precision equipment and software. This shows itself in the company’s revenue, especially with its MZB program.”
“A very holistic approach to precision ag. Rather than sit back and wait for solutions to present themselves, they are proactively working with customers to prepare them for the future.”
“They bill out a substantial number of precision tech hours, which was significant and shows they place a premium on service.”
“A nice plan in place for everything. Very clear on what they want to do, and where they want to go. It’s not a shot in the dark at all. It seems like anything they do is purposeful, rather than reactive.”
“I would hold Wheat Growers up as an example for other dealers to follow, and things a dealer has to do to be successful.”
Once management zone maps are created, they are added to the producer’s database maintained by MZB staff through their in-house nutrient management software solution, MZB Tools. This allows the internal agronomy team to make custom tailored nutrient and planting recommendations based on the yield capability of that specific zone in the field.
Integral pieces of the MZB puzzle offered to customers include soil sampling at $5 per acre, fertilizer prescription map creation at $2.50 per acre, seed prescription map creation at $0.75 per acre and free data storage and backup.
“Our agronomy staff has done an excellent job promoting the agronomy behind the scenes,” Wiesenburger says. “Customers are going to get a more detailed map with a higher end product, which is way more conducive for variable-rate plant population maps, which has grown to encompass nearly 58% of our total prescription file creation.”
In 2011, Wheat Growers had about 255,000 total acres enrolled in the MZB program, 185,000 of which were fertilizer prescription file acres. Last year, the total acreage enrolled in the program was nearly 468,000, including more than 296,000 in fertilizer prescription file acres.
The acreage increase has grown MZB revenue from $2.4 million in 2011 to more than $4 million in 2013. And last year, Wheat Growers launched a sales promotion called “The All-In Club” program, which offered producers a $2 per acre discount to enroll their complete farm into our MZB Management system. So far, they’ve had 115 producers enroll, adding another 151,000 acres to the program.
While Wiesenburger is excited about the growth, he also views the MZB program as a perpetual source of revenue for the co-op.
“We custom apply about 2.1 million acres, but MZB is the only product we sell that keeps Wheat Growers relevant on that individual acre,” he says. “We can go out and apply fertilizer, and that’s one and done. The customer pays the bill and it’s over.
“We can go out there and make a chemical application. They pay the bill and it’s done. With the MZB program, customers consider it an investment, not and expense, and they keep coming back to Wheat Growers to have us service that acre.”
Structured for Success
One of the keys to efficiency for Wheat Growers’ precision team is that each department has defined roles. While there is interaction between the precision hardware technicians, MZB staff and agronomists, Wiesenburger stresses that for the overall business to succeed, everyone has to understand and execute his or her responsibilities.
Managing such a large staff is a challenge, which is why Wiesenburger trusts a “checks and balances” system to track performance.
The cornerstone of Wheat Growers’ precision operation is its Management Zone- Based [MZB] crop input platform. Since 2011, revenue from the service-based program has grown from $2.4 million to nearly $4 million in 2013. Photo courtesy of Wheat Growers
“When one of our hardware technicians gets asked an agronomy related question, he knows he has lots of numbers he can call and get an answer for the producer right away,” Wiesenburger says. “This type of network is a stress reliever and also holds everyone accountable for their job.
“Plus, we don’t have to worry about cross training. Our MZB staff is there to do one thing and one thing well, precision data management. And I don’t want our sales agronomists in training sessions at Ag Leader, because that’s not their role.”
Currently, Wheat Growers doesn’t differentiate between hardware sales and hardware support. In many cases, these are the same individuals responsible for sales quotes, turning those quotes into orders and making sure they have all the pieces necessary to do an install.
Wheat Growers has one designated hardware phone support team member, who is often the first point of contact for customers. If it’s a more complex problem, a technician is dispatched to the farm.
“This only works to a certain point in season before all our guys are handling support calls, including myself,” Wiesenburger says. “But 95% of our customers know this is my department and most have my cell phone number. If they’re not happy, I am usually informed of the situation before our employee gets back to the office.”
Complaints are few and far between, Wiesenburger says, and he credits a dedicated and motivated staff for achieving the success that other retailers have struggled to capture. He’s observed operations where there are frequent communication breakdowns between precision departments, because roles aren’t clearly defined.
“For some other cooperatives, their precision system isn’t growing the way it should because of those communication roadblocks,” he says. “For us, it’s all behind the scenes, but when we go to the customer, they know they won’t be caught in the middle. The value for us on the backside, is having a customer that doesn’t shop.”
‘Make the Impossible Possible’
While precision hardware sales account for only about one third of Wheat Growers’ precision revenue, the service and support that technicians provide extend well beyond any individual sale.
• Be aware of the intersection and opportunity precision farming sales can create for other areas within the dealership.
• To keep them coming back, sell a complete precision farming solution not just a product.
• Embrace new technology and consider partnering with companies to stay relevant with your precision business.
Wheat Growers is a precision dealer for Ag Leader, Precision Planting, Raven and Trimble. But customers look to technicians to be problem solvers, regardless of brand, because the co-op works on a rainbow of equipment colors, says Reed Storley, parts and equipment manager with Wheat Growers.
“Our silent motto is we make the impossible possible on a daily basis,” Storley says. “One of the reasons is we have a hard time saying no to anybody. We like the challenge of getting things to work for a customer. Sometimes it gets us in trouble and sometimes we look like a hero. But whatever we do, we learn from it.”
In 2009, Wheat Growers began developing and selling hydraulic control block systems with the capability of applying three different fertilizer products. The $6,000 systems provided a solution to customers who wanted to variable-rate, but couldn’t because of compatibility problems.
“Our system is compatible with most displays on the market today and we retrofit about 15 air carts each year,” Wiesenburger says. “It’s a unique solution that’s opened a lot of doors for us.
“When we can get farmers talking to each other, and one sees the other’s John Deere air cart or hops in the cab and he’s variable-rating and says, ‘I have this same seeder, how come I can’t do that?’ We’ll get that call because we have this hydraulic block. But often the phone rings for our agronomists too with the customer asking how they can get enrolled in the MZB program once they’re able to variable-rate.”
This past fall, Storley worked with a customer who had a hydraulic drive system put on his John Deere air cart by another dealer. The customer couldn’t get the air cart or his Deere strip-till unit to work with his Deere display, so Storley and Lance Larsen, a precision ag specialist with Wheat Growers, accepted the challenge.
“Unfortunately, the customer wanted to start strip-tilling right after he was done harvesting and our guys were at a training session that week. Timing was horrible,” Storley says. “But the customer had a John Deere technician come out and tell him, ‘This will not work,’ and we knew we could make it work.”
Storley and Larsen left training early, met the customer on his farm and worked until 2 a.m. to build a new harness to connect the air cart and strip-till rig with the display. They had the customer in the field strip-tilling the next day and were able to say “Yes” when someone else told him “No.”
One of the challenges with OEMs is that they often have one color in their head, Storley says, and sometimes have a hard time listening to anyone else’s input when it comes to compatibility.
This isn’t a problem for Wheat Growers and they are often willing to “mix and match” components to come up with a solution for customers. Wiesenburger acknowledges the advantage this gives Wheat Growers over dealers that may be tied to one brand of equipment, but it’s not one he wants to exploit.
“We have excellent working relationships with suppliers and dealers and want to maintain those,” he says. “For the John Deere and Case IH dealers, they don’t want to have someone on staff who deals with liquid starter fertilizer systems and knows the inner workings and pump pressures.
What Others Say
Precision Farming Dealer interviewed Jeff Dickens, Ag Leader Technology territory manager for North Dakota and South Dakota, Troy McKown, Precision Planting northwest region manager and Gregg Witt, Raven Industries account manager for North Dakota and South Dakota, to get their personal observations on the 2014 Most Valuable Dealership, South Dakota Wheat Growers.
Difference Makers. “Honestly, it’s all about their employees. They have a drive and all the characteristics to be the best at what they do,” says Dickens, who has worked with Wheat Growers since 2011. “Their staff on the precision side want to be there and stay on top of technology. If not for them, they probably wouldn’t be half as successful as they are today.”
Above and Beyond. “What makes them successful is they are willing to put in the effort on the education side for customers, and not just go after a quick sale,” says McKown, who previously worked at a local precision competitor of Wheat Growers. “They make sure the solutions they provide are consistent with the local agronomic practices. Without the education, precision farming goes nowhere. Wheat Growers puts the pieces together from the seed department, to the agronomists and the precision staff.”
Taking Chances. “They are a unique organization. We often talk internally about how to replicate the culture of experimentation they have,” says Witt, who has been working with Wheat Growers since 2001. “They’re not afraid to experiment, because they know what works and what doesn’t work. This makes them a pretty exciting group to work with. The risk taking on their end often times works and they have the customers willing to go with them.”
“Brent [Wiesenburger] is a fantastic leader and always looking for the next cutting edge side of precision ag,” McKown adds. “Whether it’s picking the next innovation or creating their own brand.”
Selling Solutions. “They’re not just selling a boom valve or flow meter, it’s a complete starter fertilizer kit or variable-rate fertilizer system on a center spreader,” Witt says. “They certainly offer more than just parts. They sell solutions; getting customers what they need, not just want.”
“It’s not a blind sales pitch they’re after, which is hard to find,” McKown says. “They’ve always been a good seed meter dealer for us and they’ve taken on the new electric drives and jumped right on board with their key customers.”
“That’s not their business. They are happy to hand off some of that work, because we’re not over here building planters and tractors.”
Despite the success, Wiesenburger admits that one of his biggest challenges will be finding ways to expand Wheat Growers’ precision operations, without diluting quality of service.
“It’s a farmer-owned cooperative, so for us to keep spending their money, we need to show them a return on that investment,” he says. “I present the precision budget to the board of directors and for them to continually say ‘Yes, we’re going to keep investing,’ it has to be a profit center. It can’t be a loss leader.”
One of the short-term objectives is to implement a cloud-based software system to manage the MZB program to sync data more efficiently. Currently, the MZB team relies on a desktop-based system, which is both tedious and time consuming for sales agronomists to manage customer files.
“This will give us flexibility in the future to tie our program into other value-added programs for the producer, including an online portal where they can log in and access their data,” Wiesenburger says. “Having the grower registered and logged in, they can get the same notifications the agronomists have. That’s magical, because we’ve just added accountability into the system.
“If the agronomist isn’t doing his work, the grower gets a text message that says there is a soil test back, let’s get this done.”
Wheat Growers is working with a Pennsylvania-based software provider to implement the cloud-based system, likely in 2014. The co-op is also partnering with a North Dakota-based imaging company to develop an application programming interface (API) to add high resolution field imagery into MZB packages.
At the top of Wiesenburger’s wish list for the future is to develop a cloud-based system that captures information from the grain cart and ties it back to the yield monitor to collect and analyze more accurate harvest data than what is collected today.
“The most important thing we have on our table right now is figuring out how to integrate those systems. That is the Holy Grail,” he says. “It’s a race right now for the industry to be the first one to automatically pull data off the data card.”
Another critical step to long-term sustainability, Wiesenburger says, will be developing additional APIs with companies that could position Wheat Growers as a centralized source for their customer’s farm management needs.
“We’re fortunate to be in the position that farm equipment companies want to sell us machinery. We can use that as a leverage point, like our customers leverage us,” he says. “We can use that with the OEMs. If you want us in Deere sprayers, then we need to have our information flow back into our software.”
Wiesenburger also says, as a smaller company, it will be important to protect the success they’ve made in establishing and growing the MZB program. Doing so could involve partnerships with companies including Monsanto or Winfield Solutions.
“Staying relevant in 5 years is really going to hinge on great relationships with those suppliers. We can’t sit back and look at them as competition,” Wiesenburger says. “We need to look at them as partners to find solutions that suit all our needs. The last thing I want is for them to come in and take away what we’re doing with our MZB product.”
The end goal for Wiesenburger and his precision farming team is to improve the value that customers receive, and prepare them for the future. This comes through providing a complete solution, not just a part of it.
“At a lot of places, producers get stuck in the middle of one company doing an installation, another one doing software and another handling the data,” he says. “We don’t have that here. But it all comes down to service. If our phone isn’t ringing, I take that as a sign that customers don’t like us.”