Skeptical Farmer and Co-Op Find Mutual Benefit in Relationship

Lance Petersen says his dad likes to recount stories from his childhood of ignoring the instructions that came with Lego sets and building his own thing. 

“That’s the way we farm — strip-tilling and fertilizer placement. It’s all a bit in our own interpretation,” he says. 

A self-described contrarian, Petersen (pictured on left) doesn’t shy away from elephant in the room topics or being in the hot seat. He’s been an early adopter of online procurement for his crop inputs. For the past four years, he’s bought 100% of his seed without a face-to-face meeting. Even before that, he was buying crop protection products and fertilizer via online marketplaces and retailer portals. 

“I used to say co-ops were dinosaurs, but I found the one that isn’t,” he says. 

Earlier this year he joined the board of directors for CFS in southeastern Minnesota. What makes this even more unique — Petersen lives two hours outside its traditional geography. 

“I saw Lance buying inputs via our portal. He came to our location, loaded and was a happy customer,” says K.C. Graner, CFS senior vice president (pictured on right). “I called him and asked for an hour of his time.” 
Graner asked Petersen how he found CFS, why he chose to do business with them, to share his experience and what CFS could do different.

“That conversation was a springboard. It completely discredited some assumptions I had about transactional customers,” Graner says. “If we don’t engage well digitally, we’re just another white pickup.”

Today, Petersen buys a majority of his farm’s inputs from CFS, and he says 90% of his total inputs are purchased via a portal. His farm is able to self-apply all its fertilizer and crop protection. As a customer, he says his number one requirement for a business partner is transparency. 

“We need open mindedness to not have to stay inside the box that has been drawn,” he says. During board meetings he recalls: “I’ll raise my hand, and say I’ve done it in a different way. And it may not work for everyone, but it’s working more and more each year for more people.”

A New Mindset
Petersen brings a diversity in purchase preference and perspective, and it’s something Graner says has added to their business. 

“What we need to do with inertia is recognize how we made decisions in the past, and frankly a lot was based on how far we wanted to haul an anhydrous tank,” Graner says. A new parameter for decision-making lies in both hard goals and soft goals for Graner and the team. 

“My philosophy leading our enterprise facing 4,000 customers every day is to make their life easier. Half the value in investing in digitizing our business is making lives of customers easier. The other half is internal: easier workflow,” he says.

While they have not set hard parameters on using their new digital tools, Graner says their top selling tool has 90% of their farm plans with customers shared and accepted in the grower portal. About 70% of all plans have been shared and viewed by the CFS farmer customers. 

“The biggest thing we’ve revealed is we can be more agile than we ever thought,” Graner says. 

He shares six springs ago, his first season with the co-op, they had a previous transactional software in place.

In all, they sold $100,000 of product. They learned transactional customers are not loyal. They follow price. They rethought their digital approach to be customer-focused rather than chasing the lowest price. 

“It’s about muscle memory. We’re training ourselves and our customers a better way. And once they experience it, there’s no going back,” Graner says. 

Graner hasn’t seen farmer behavior fall in-line with age or scale of operation stereotypes. The early adopters are leading the way, but most everyone else is happy to follow suit.