Four years after its launch, California-based HarvestPort is expanding its platform into the Midwest. In early 2019, it merged with The FarmElement, an Iowa-based startup aiming to connect farmers and suppliers in new ways.
Originally HarvestPort launched as a way for farmers to share idle equipment and assets. In 2018 it introduced an e-commerce platform. Now the company has grown the business to primarily focus on helping farmers procure inputs they need for farms.
“We serve as the procurement arm of large growers not simply to cut seasonal costs, but to help them shift to operations that reflect the macro trend from small-molecule chemistry to biology/soil health focus, which will better position them to save money for generations to come,” says CEO and founder Brian Dawson. “The grower pays us a per acre fee, and we form partnerships to get what they need for their farms.”
He explains the model has worked best in California with larger scale farms and land management companies. One such example is Trinitas Farming, which owns more than 20,000 acres of almonds in California.
“HarvestPort adds value through procurement, logistics, and supply chain management,” says Ceil Howe from Trinitas. “HarvestPort additionally allows managers to focus on key business decisions because they do not need to focus hours of their day chasing deals with various suppliers. This results in costs savings and yield improvements.”
It’s the larger acreage farmer HarvestPort is targeting in the Midwest as well.
“We don’t want to completely disrupt the traditional brick and mortar retail. We want to use their assets to be nimble on logistics,” Dawson says. “Other agtech marketplaces are adding complexity because they are cutting out a phone call to the retailer.”
As an example, HarvestPort receives a list from a farmer on what they’ll need for inputs and also augment that list with from their datasets predicting necessary farm inputs. They aggregate the needs across all of their farmer members and go to the suppliers they’ve forged relationships with to negotiate best available pricing. Dawson says this often includes traditional ag retail locations to get a bid.
Dawson claims HarvestPort saves all of its clients between 10% to 20% on input costs. But those savings he says will not be at the expense of not being “high touch.”
He hesitates to compare this to a cooperative, but rather he sees cooperatives as potential retail partners. The sweet spot for HarvestPort is delivering on efficiencies that aren’t currently captured.
Dawson notes an often overlooked tool to lower input costs is timing, so HarvestPort uses data to try to work ahead of an input need and negotiate farther out for best pricing.
One input supplier in the HarvestPort network is Penny-Newman, and its CFO Matt Nicoletti describes their partnership as a modernization of their sales approach.
“HarvestPort has a means of giving us transparency at a greater scale—without taking on more people,” Nicoletti says. “HarvestPort presents us with a large group of growers we can sell into.”
Nicoletti also says the HarvestPort structure allows Penny-Newman to maintain the relationship with the grower.
Dawson says HarvestPort has found its distribution model is a good fit for novel or new products to the market. For example, another way HarvestPort is looking to deliver value to growers is by providing and tracking products that can carry value-added claims in the marketplace such as sustainable or regenerative.
“We believe that if there is not an operational shift at the field level, farm costs will continue to rise as will growers’ dependence on the small-molecule chemistry products from a handful of major manufacturers,” he says.