Web sites offer new on-line buying and selling tools for pork producers.
After selling his sows last summer, Mark Gunn needed a new source of feeder pigs for his finishing operation near Janesville, WI.
Gunn's search eventually led him to the Farms.com Web site, where he bought 250 feeder pigs in February.
Using the Web site's weekly auction is simple, he explains. Producers must provide background and financial information before they receive the code to access the auction.
Using the Internet for purchasing livestock has its advantages and disadvantages, Gunn says. It's easy to log onto the auction via his home computer - an advantage. But, he cannot examine the health status of pigs purchased over the Internet - a definite disadvantage.
The Wisconsin producer also uses the Internet to purchase inputs for his crop operation. He advises caution in buying livestock.
"A bag of DeKalb seed corn is a bag of DeKalb seed corn. It's all the same," he says. "With livestock, you have to see them and know for sure, especially on the health status."
Gunn had confidence in the health status of the pigs he bought on-line because he had previously purchased pigs from that supplier.
The prices paid for pigs on the Internet are the same as those paid on traditional sales, Gunn says.
Beef and crop producer Tom Revier, Olivia, MN, is one of three founders of PigSale.com. He finds a faster technology transfer in the hog business, as compared to the beef industry.
"The pork industry is such a fast-paced industry; they've had to grab onto technology faster," he says.
From on-line livestock auctions to classified advertising, marketing tools for producers abound on the Internet.
To be successful, the dot-com companies that offer on-line marketing tools must figure out how to combine cutting-edge, on-line capabilities with old-fashioned personal communication, says Warren E. Clark, an e-commerce marketing communications consultant with Clark Consulting International Inc. and Farms.com.
"Pork producers like to deal with human beings, not computers, to do business," he adds.
Right now, most pork producers who use the Internet aren't actually using capabilities like on-line feeder pig purchasing. But they are watching prices and thinking about participating, Clark says.
"As producers become more comfortable with Internet access and more convinced of the time and cost savings of utilizing on-line transactions... volume will increase and 'price discovery' will evolve into on-line transactions," he adds. Access Is Growing
The number of U.S. farms with Internet access more than doubled from 1997 to 1999, according to the National Agricultural Statistics Service. Twenty-nine percent of all U.S. farms were on-line in 1999; 52% of farms with sales of more than $250,000 had Internet access.
Launched in 1995 and now one of North America's largest agricultural e-commerce sites, Farms.com facilitates buying and selling of feeder pigs and cull sows and boars.
Gary Lannin, Farms.com marketing director, says 10,000-25,000 hogs are sold each week through either the continuous on-line exchange or the bimonthly auction. To sell or buy through Farms.com, a producer first registers with basic information. Shoppers can view the volumes and specifications of the pigs and then submit a quote or request on-line or by phone.
For each lot of pigs posted on the site, a seller must provide the lot size, genetics, health status and location. A follow-up call from a Farms.com customer service representative verifies each posting. Farms.com keeps the seller's identity confidential.
Farms.com seeks buyers and sellers, and the bidding process goes on until the two parties agree on a price. The seller accepts a bid either by telephone or on-line.
Farms.com collects a $1/head marketing fee from the seller and a $1/head procurement fee from the buyer. The site takes possession of the pigs only after a complete veterinary inspection, which is arranged by a Farms.com customer service representative. Then they arrange for transportation. The seller usually receives payment from Farms.com within 10 days of delivery.
The veterinary inspection is a form of preventative maintenance, says Lannin. The company guarantees the pigs meet all the standards posted. Farms.com takes responsibility for settling with the seller. That way, the buyer is protected from problems like death loss, he says. If a health problem is found, Farms.com representatives give the buyer the opportunity to proceed, cancel the order or renegotiate.
Small, Exclusive-Service Site Launched in April, PigSale.com is a buying and selling service exclusively for pork producers. Consignments include early weaned pigs, feeder pigs, market hogs, breeding stock and cull sows and boars.
Sellers and buyers register and provide a bank credit reference.
Once a seller is registered, a PigSale.com field representative sets up a visit to view the pigs and helps complete a consignment sheet describing the pigs.
PigSale.com then posts the lot information, asking price, seller's name and address on the Web site. Consignments stay posted until the asking price is met or a minimum of seven days. After a week, the seller can re-consign the pigs or withdraw them from the site.
When the pigs sell, confirmation of the total purchase price goes to the buyer and seller. The buyer pays for transportation, but PigSale.com can assist with trucking sources. The buyer pays PigSale.com when the pigs are delivered. The field representative delivers the check to the seller, who pays a $2-5/head animal sales fee. (At press time, the commission is free as part of an introductory promotion.)
PigSale.com issues no warranty on the animals and does not assume liability regarding the animals' health. Death loss and sick pigs are matters between the buyer and seller.
Futuristic Views Producers need to be ready to use new technology, Gunn says.
"The Internet is another avenue of managing your operation that makes you more efficient," he says.
In the future, producers will use new technology and conventional business methods for their operations.
"Just as newspapers were not replaced when radio was introduced, our traditional dealer network and means of making purchases will not disappear but rather be enhanced through the convenience and cost-savings of on-line transactions," Clark says.
Services offered: product and livestock auctions, classified advertising, Ag Superstore with specially priced supplies, market and weather information, commodity news and futures prices.
Participation requirements: Registration is required to enter auction or place a classified ad.
Registration requirements: name, e-mail address, zip code and, if necessary, shipping information.
Cost to seller: free classified ads; 5-12% commission for items sold at auction.
Cost to buyer: free classified ads.
Services offered: on-line buying and selling of early weaned pigs, feeder pigs, market hogs, breeding stock and cull sows and boars.
Participation requirements: security check via password, username, credit check and an acceptable credit rating.
Registration requirements: e-mail address, password, name, address, phone, fax, bank credit reference.
Cost to seller: $2/head animal sales fee for early weaned pigs, feeder pigs and market hogs and $5/head for breeding stock. During the introductory period, commission fees are waived.
Cost to buyer: free.
URL: www.vmarkets.com (more than 50 related domains can be accessed from this URL)
Services offered: real-time classified ad system, feed purchasing through ecorn.com, virtual marketing system with a secure shopping cart system, transportation through backhauling.com, value-added marketing services, producer forum, sale and auction calendar through eventdirectory.com.
Participation requirements: Registration is required to enter the auction or place a classified ad. To sell products, a company must meet all federal and state requirements and provide background information; value-added products must meet Pork Quality Assurance guidelines.
Registration requirements: User provides contact information for classified ads; complete business information is required for shopping cart system.
Cost to seller: free classified ads; shopping cart system costs vary.
Cost to buyer: free classified ads.
Services offered: on-line buying and selling of feeder pigs and cull sows and boars, regular on-line auctions, animal health products, news, weather, market information and career services.
Participation requirements: Buyers, sellers and shoppers must pre-register.
Registration requirements: name, address, phone, farm and bank information.
Cost to seller: $1/head.
Cost to buyer: $1/head.
Services offered: on-line marketing and web design, calendar of events, sale results, on-line chat and bulletin boards, association information.
Participation requirements: open to pork, beef, sheep and goat producers and agribusinesses.
Registration requirements: none.
Cost to seller: free; web design cost varies by client.
Cost to buyer: free; web design cost varies by client.