Mar. 2, 2018
Indigo Ag has launched an on-farm storage program for U.S. farmers. This program facilitates the identity preservation of grain, which underpins the marketplace that Indigo is building to connect farmers directly with buyers of high quality, identity preserved crops.
Through its on-farm storage program, Indigo works with farmers to store and monitor harvested grain on site. Indigo then manages pick-up and transport of grain directly to buyers. While some growers have existing on-farm storage systems, Indigo offers to finance grain bagging systems at no upfront cost for those without.
This storage approach brings direct benefits to farmers, including simplified logistics at harvest, savings on transportation, and payment for any improvement in basis between harvest and grain collection. In addition, Indigo compensates farmers for loading and monitoring grain while it is on their farms, bringing the total potential economic benefit to $0.45-0.65 per bushel, an increase of about 5% to 20% over today's commodity prices, depending on the crop. This benefit is in addition to the price premiums guaranteed to those who enter into grain production contracts with Indigo. Farmers who participate in Indigo's grain bagging system pay back a discounted cost of the system over five years at zero percent interest.
"On-farm storage has the potential to significantly improve farmer profitability," said David Perry, Indigo's President and CEO. "Not only does it provide logistical efficiencies, but also it enables a new marketplace for buyers and farmers of high quality, identity preserved crops. When combined with the yield improvements from Indigo's microbiology and data sciences, we have the potential to really improve the economics, and the environmental sustainability, of farming."
Indigo's on-farm storage program is an alternative to the existing commodity system, where grains are blended with little regard to source, seed, or process by which they were grown. Segregation through on-farm storage preserves the identity of the grain, providing farmers with access to a marketplace of buyers seeking grain grown to certain specifications. In ensuring identity preservation, Indigo is responding to the preferences of consumers, who are increasingly interested in the origins of their food.
Indigo's on-farm storage program is available to all U.S. farmers producing through the Indigo Model. The grain bagging system, financed by Indigo, is available to wheat, corn, and soybean growers who farm at least one thousand acres and commit to producing through the Indigo Model for a period of five years. Through this model, Indigo contracts with farmers to purchase crops grown with the company's microbial and digital technologies.