Making it REAL

Bruce Schmaltz knows he isn’t the only person ever to have said it: “We have to continually ask ourselves in this business ‘what can I do to make the farmer — my customer — an extra buck?’ If the farmer remains profitable, then we remain profitable.”

That said, just because a thing gets said a lot doesn’t mean that it can’t possibly be true.

Equally, as Schmaltz passionately believes, just because a thing is true, that doesn’t mean it’s easy, or that everyone is going to get it right.

And that, in Schmaltz’s eyes, spells business opportunity.

A south-central Alberta company that has evolved over six decades from a car and machinery dealership into a full service agronomy centre, Schmaltz’s DynAgra Corp. is one of the few remaining truly independent agri-retailers and agronomic service providers left in Western Canada.

Today, DynAgra has expanded well beyond its base at Beiseker, a farming village of 800 located 70 km northeast of Calgary, with branch depots at Carseland, Standard and Rolling Hills, southern Alberta farming communities all within about 150 kms of Beiseker.

To anyone who does business with it, DynAgra is a company that knows where it has been and also knows where it’s headed. On the inside, however, the business thinkers who are driving DynAgra are convinced their success is based just as much on knowing ‘how’ to get where they want to go.

It takes insight, Schmaltz shows. It takes commitment to be on top of technology too, and it also takes skilled organizational design that gets the most from smart people, including consultants and outside experts.

As DynAgra wrapped up its business year at the end of August 2008, Bruce, company president, turned the daily management of DynAgra over to his two sons, Tasha and Remi, who have been with the company for the past three years. Tasha (28) is general manager, while Remi (27) is manager of corporate development.

As a family, the Schmaltz’s see plenty of potential and business growth opportunities by applying their core principles to the delivery of new crop production technology.

“Agriculture is an old business,” says Tasha, “But you look at the new technology being applied today, and it creates new concepts for business and new opportunities people hadn’t even thought of five or 10 years ago.”

Bruce agrees. “Agriculture has been 20 to 25 years behind other industries in adapting new technology,” he says. “The industry has a long way to go yet, and there is so much potential. Adapting that new technology is where the future is.”

Multiple innovations

While DynAgra’s reputation as a crop input supplier was well-established, the business hit a new stride when Tasha and Remi joined the company in 2005. Beyond selling chemical and fertilizer, DynAgra looked to use the latest technology to help producers improve crop production efficiency, as well as improve over all farm management.

Today it is not only a supplier of chemicals and fertilizer, the company provides a full line of agronomic services that can range from a few minutes of production advice over the phone to a full season of field scouting, crop monitoring and advisory services.

One of the main business focuses is DynAgra VRT — services specializing in variable rate fertilizer technology. By using a combination of soil testing, satellite imagery or mapping, yield monitoring and ground truthing, the company can produce farm and field-specific prescriptions on how much fertilizer to use to optimize yields. This service is being offered over an expanding area of Western Canada.

The company has also developed DynAgra Finance, which provides producers with credit options and bridge financing during the year.

Also important, DynAgra expanded and refocused the role of their front line sales and marketing team, and they have a full time researcher on staff involved in crop protection and management research and development.

As well, crop marketing information is posted on their expanded internet website at www.dynagra.com,which also provides access to many of their other services.

“I think producers see DynAgra as bringing innovation to the marketplace,” says Tasha. “On the agronomic side we have variable rate technology and on the retail side we have upgraded our plants. We have created financing options, and we have upgraded our software so producers can go online, for example, and look at their accounts or make a payment, and these are all changes that make our company more inviting.”

Agrees Remi: “Our services have done well with the progressive farmer who is looking to move his business forward.”

For farmers in the economic shadow of Calgary, Canada’s oil and gas capital, there are pros and cons. Pressure for commercial development as well as residential, recreational and countryside living has significantly increased farmland values.

Those higher land prices make difficult economics for bona fide farms looking to expand, so producers are challenged to get more productivity and increased profit from their current land base.

By applying the blend and rate of fertility where it will do the most good, the efficiency of variable rate technology is appealing to more and more of these producers, whether they are relatively small or relatively large farmers.

“They see VRT technology as simply making good sense,” Remi says. “I can see two or three years down the road that VRT will be as commonplace as auto-steer has become in the last five years.”

In a business environment where fewer but bigger players are dominating the agri-service industry, DynAgra expects to grow, always keeping its primary purpose in sight.

“It goes back to the basic objective of figuring out ways to make the farmer an extra buck,” says Bruce. “We don’t sell machinery and we don’t sell housing packages. Our business specializes in doing what we can — using our skills and technology — so the farmer is producing the most efficient crop possible.

“And if the customer has a question for the guy who runs the place, he is right here across the counter or on the other end of the phone. He isn’t two provinces away, or someone you can’t find.”

Meanwhile, DynAgra has looked at how it delivers its new services, including a fresh look at the point where decisions get made, the front-line sales rep.

“Now we no longer have just agronomists,” says Remi. “We have created a team of business development specialists.”

Backing up the sales team, DynAgra has addressed logistics. When it makes a commitment to the grower, it will deliver, Remi says. “We don’t say we will do this or that, or sell you a product, and then not deliver.”

“DynAgra Finance has also appealed to a lot of producers,” Remi adds. “We started that three years ago and now I see some of the big players in agri-financing are offering a similar package. It is a convenience that helps them with their overall farm management.”

The financing option allows producers to determine a flexible payment schedule that fits with their grain marketing.

Customer loyalty is still important, but at the same time DynAgra realizes that as their own business changes, farmers are also looking for more flexibility and for the ability to compare prices and services.

One of DynAgra’s major changes, reflecting this new era of agribusiness, involves unbundling its services. At one time fertilizer, chemical and agronomic services were all tied together, explains Bruce. “If you brought crop inputs for example, agronomic services were thrown in or somehow subsidized,” he says. “Everyone was offering packages. Now, we have gone to a system where everything is separate.”

Such innovations, the Schmaltzes believe, will keep them ahead of the competition by helping their farm customers improve their own bottom lines.

While there are certain logistical and economic limitations to hauling fertilizer and crop inputs, technology transfer on the other hand has no boundaries. Electronics, computer technology and the internet make it possible for DynAgra to deliver some of their agronomy and VRT services to producers across Western Canada and North American just as easily as it is to the guy 10 miles down the road.

Remi sees the trend toward big business consolidation in agriculture as a benefit for companies like DynAgra. “Not everyone wants to deal with big companies,” Remi says. “So we provide an option. And a lot of companies too have a certain economy of scale, and aren’t able to provide the level and quality of service that we can. We can provide that one-to-one contact with producers.” CG

By Lee Hart, CG Contributing Editor