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Cover Crop Exchange grows a tech-based marketplace for a traditional industry

Cover Crop Exchange co-founders Mike Ackerman and Nate Belcher

Mike Ackerman’s web and software development expertise, combined with Nate Belcher’s experience owning a traditional cover crop seed company, added up to just the right set of skills needed to bring an idea for a cover crop marketplace to fruition.

The co-founders launched the Cover Crop Exchange platform in early 2018 and since then, have been gaining ground in their mission to alter the landscape of the cover crop seed market––a market not traditionally known for its tech.

Bringing technology to a traditional market

Cover crops are a trending soil health practice used by farmers to protect and enrich soil. According to the organization for Sustainable Agriculture Research and Education, cover crops slow erosion, improve soil health, enhance water availability, control weeds pests and diseases, and can increase crop yields, among other benefits.

Belcher said that farming technology and the agtech industry have progressed in terms of processes like precision planting, but not in a way that is advancing the market.

“From the market side, not a lot has changed,” said Belcher. “We want to open up that market so farmers have a lot more options and can make more money, frankly.”

Belcher said that in traditional seed sales, cover crop growers sell their seeds on a wholesale market at a low price. The seeds are then marked up as much as 200 to 300 percent as they pass through anywhere from four to six middlemen, before reaching the actual farmer buying that seed.

Belcher’s traditional cover crop seed company was part of that process.

“I realized that we were making good money because we were part of that markup,” said Belcher. “The idea of the Cover Crop Exchange is to get rid of all those middlemen through a technology platform that connects growers with buyers, so the growers are getting good money for their seed, and the buyers are able to purchase that seed at a discounted price.”

Additional benefits

Belcher explained that the other benefit of the marketplace is its potential to open up opportunities for growers to do something different, like add cover crop rotation to their corn and bean crops.

Belcher said the marketplace also gives farmers the opportunity to become a part of the “soil-health renaissance” and farm sustainably or regeneratively. The use of cover crops allows for the growing of food while also making farming systems more productive with fewer chemicals and less toxicity.

“Cover crops can build soil to produce high-yielding, high-quality crops without all the toxicity,” said Belcher. “Cover crops are the one thing I’ve come across that every farmer can do, can implement today, and can do on a massive scale. We think [cover crops are] the fastest, most effective way to get to that true sustainability.”

Even if a grower doesn’t make growing organic food a priority for their business, cutting down on the use of chemical products saves them money while returning a potentially higher-quality product.

“Some farmers are not opposed to using chemicals, but if they don’t have to [use them], it saves them money right off the top,” said Belcher. “For big farmers, just eliminating one pass of herbicide because they were growing cover crops can save them $50,000 to $100,000 right off the top.”

The challenges of disrupting a traditional marketplace

How the marketplace will benefit growers and farmers is clear, but the co-founders said there’s still a challenge in getting buyers and sellers to move towards a market that is tech based.

Belcher said that getting farmers to set their own prices has taken some explaining and hasn’t been the most fluid of steps throughout the process, given the industry’s generations-old model of buying and selling through co-ops with set prices.

“Farming has become a very interesting industry in that farmers are buying their inputs at retail and then expected to sell at wholesale at whatever the market tells them the price should be,” said Belcher. “We see some confusion when we tell them, ‘You name your price. You as the farmer know what you need to get out of that crop to make it work and make a profit.’ They haven’t been used to that.”

An important future for cover crops

The co-founders see this model as the future model for other markets too, such as broad-acre commodities.

“There’s no reason technology can’t connect growers and buyers directly,” said Belcher. “This industry has kind of lagged behind on that, but it’s coming. The profit margins for growers are so much better, and from the buyer’s point of view, they’re getting a way better deal. It’s a win-win for both parties.”

The co-founders are also expecting an increase in the marketplace adoption around harvest time. Prime cover crop season is just now approaching and goes through the fall.

“We’ve gotten a lot of interest, but part of it is also timing,” said Ackerman. “We have a number of people who are interested in selling their seeds through the platform, but it’s dependant on harvest time.”

The co-founders said as happy as they are to be contributing to a change in the cover crop market, they’re as equally excited to be part of a solution to create better quality, sustainable food.

“As much as it’s focused on cover crops, we want to see high output food feeding the world––high quality, nutritionally dense, toxic-free food, which is the way it should be,” said Belcher. “That’s what’s driving us, but we have to focus on how we get there. It’s not just picketing and marching on Washington. This is our way of making that happen on a global scale.”

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Christine Burright McGuigan is the Managing Editor of Silicon Prairie News

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