SAN FRANCISCO (03/03/2000) - Three giants in the brick-and-mortar world of agricultural commerce have agreed to form an online marketplace where farmers can purchase seed, fertilizer and chemicals, and market their crops to distributors.
Rooster.com, an independent company and a joint effort from Cenex Harvest States Cooperatives, Cargill and DuPont, will launch by May 1. Geared toward grain farmers, the site marks a concerted effort by offline companies to compete with pure-plays like Farmbid.com and Farms.com.
Rooster, which is hunting for a CEO, bills itself as neutral ground and says it would welcome partnerships with other brick-and-mortar powerhouses, such as Monsanto or Dow Chemical. Many such companies have been approached by the founders of the three firms, and some might join before launch, says Cargill's vice chairman, Bob Lumpkins.
The founders envision Rooster as an online mall - local dealers and corporations will have space on the site and will set their own prices. Farmers can browse through seed catalogues or purchase agricultural chemicals. Within a few months of launch, Rooster expects to allow farmers to market their output to processors placing bids. Auctions have not been ruled out.
Rooster refused to disclose financial terms of the agreement or specify commissions it might charge buyers and sellers on the site.
Although about 70 percent of the nearly 2 million farms in the U.S. are online, according to Rooster, luring them to the site may take some work. "The competitor is the old way of doing business," says Lumpkins, referring to local dealers frequented by farmers.
Then there are netcos like Farmbid, which holds agricultural auctions and sells equipment, crops and pharmaceuticals. Farmbid expects to finalize a deal with a wireless company in the next couple of days, which will enable its customers, many of whom are in rural areas, to connect more easily to the Internet.
"We feel they definitely validated the market space," Farmbid CEO Ted Farnsworth says of Roooster. But he argues that the site's setup leaves farmers paying the same prices they do offline.