The Hard Truth about Ag Chem Pricing in the UK
Yagro went live with our Ag Chem Price Check service late last year, helping UK farms anonymously benchmark their chemical spend against verified market prices - all through our automated, digital service.
With the chemical purchasing season in full swing, we look at the emerging findings:
1. Price variations in the market are HUGE
It is common to see a farmer paying 30% more for his chemistry than his neighbour – even considering rebates, tied agronomy, etc. Here are some examples on common brands:
2. There is no determining factor for this variation
We have analysed the data to consider all the following:
Time of season
Size of farm
Size of individual order
Annual spend of farm
Loyalty to supplier
There is no significant correlation between any of these factors and the variation in price paid on farm. On average, for example, larger farms do not buy any better than smaller farms.
Instead, we see a quite random range of buying performance across all the products a farm buys: It is critical that farm managers analyse each and every product to understand where opportunities lie.
3. Current rebates barely scratch the surface
We have worked closely with our Price Check customers to determine their final rebate positions, versus their previous approach. The consistent result is that farms are only capturing around 10% of the rebates ‘owed’ to them by suppliers.
So what does this mean?
EVERY farm could be achieving significant savings through better buying on price alone: regardless of farm size, relationship, or any other factor. There are easy wins just by knowing where to focus your efforts.
Ag Chem suppliers get away with this, knowing there is no reliable market price information available to a farm manager to challenge his bills. No amount of conversations down the pub, or price rumours on unverified forums, can give the farm the full data to know exactly where he stands.
The price you get is all down to your specific negotiating ability and knowledge of wider market prices. Yagro Price Check puts that knowledge in your hands so you have the strongest negotiating position.
Farmers using Yagro Price Check have unlocked rebate opportunities of up to £44/Ha
4. The UK could save over £200m in input costs by switching to post-patent brand alternatives
If you’re buying top chemistry from the top brands – the chances are, there’s an alternative brand of very high quality which you can get for much cheaper – but your supplier might advise you away from it!
We have seen savings up to 60% on alternative brands from quality manufacturers. Adding all these opportunities up, we estimate UK farmers are overpaying £200m for unnecessary top brand chemistry. ALL farms can be buying better through alternative brands – and it might just help you manage those costs through Brexit too.
Yagro’s Price Check links all products with the same active chemistries, so can you navigate brands with live market prices to uncover opportunities relevant to you. See last year’s blog on opportunities in post-patent chemistries.
Farmers on Yagro have discovered savings of up to £67/Ha on alternative brand chemistry
At Yagro we use these insights to help you deliver a better bottom line for your business, and the whole process is anonymous. If you haven’t already, join Ag Chem Price Check today – it’s simple, fast, and will deliver enough savings to justify that next holiday!
'I just wish I'd done this years ago!' ~ Another Happy Farmer