AG CHEMICAL PRICE TRANSPARENCY

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1 FBN SM SPECIAL REPORT AG CHEMICAL PRICE TRANSPARENCY Farmers Business Network SM July 2016

2 FARMERS BUSINESS NETWORK INTRODUCTION 2016 has been a challenging year for farmers. With net farm income forecasted to be down 56% since , many farmers will struggle to make a profit this season. In challenging years, farmers seek every opportunity to reduce operational costs, particularly with expenses; land, seed, fertilizer, and chemicals. Herbicides and insecticides can account for as much as 15% of a farmer s variable cost of production. 2 With historically low commodity prices, even small differences in chemical prices can make or break a season. Based on our research and the experience of many FBN members, one of the biggest barriers to controlling costs is the variability and lack of transparency around ag chemical prices. Though the USDA does regular surveys on the amount that farmers spend on chemicals on average, very little is known about the real prices individual farmers pay. By shedding light on these real prices and creating a better understanding of how prices vary from region to region, farmers will be able to make better decisions on where to find the best prices for their ag chemical purchases. We believe that farmers should have access to fair and competitive input markets, and that increasing price transparency is a vital step towards that goal. METHODOLOGY To provide clarity on national pricing information to our members, FBN aggregated actual invoices and price quotes from members for the pesticides they purchased in the 2015 and 2016 crop seasons. FBN received over 1,000 unique pricing data points across 13 states for over 200 insecticides, pesticides, and adjuvants. This report outlines the pricing variances on a subset of this pricing data for common ag chemicals. These prices do not include any rebates. 1 United States Department of Agriculture - Economic Research Service. Dips in Farm Sector Profitability Expected into 2016 ( 2 Iowa State University: Estimated Costs of Crop Production in Iowa (

3 NATIONAL PRICE DIFFERENCE FOR POPULAR AG CHEMICALS These are the lowest and highest prices paid nationally for eight common ag chemicals in 2015 and FBN members reported price differences up to 177% for Gramoxone SL and 314% for AMS Dry across this two year period. PAID HIGHEST PRICE PAID % DIFFERENCE SHARPEN $ $ % ATRAZINE 4L $10.13 $ % LAUDIS $ $ % STATUS $2.96 $ % PRIAXOR $ $ % POWERMAX $13.50 $ % GRAMOXONE SL $21.50 $ % AMS (Dry) $0.14 $ % REGIONAL PRICE DIFFERENCES FOR ROUNDUP POWERMAX These are the lowest and highest prices paid within regions for Roundup PowerMax in 2015 and FBN members reported price differences up to 98% in the Midwest across this two year period. PAID HIGHEST PRICE PAID % DIFFERENCE WEST $19.25 $ % NORTHERN PLAINS $13.50 $ % MIDWEST $15.60 $ %

4 STATE-LEVEL PRICE DIFFERENCES FOR A SINGLE CHEMICAL These tables relate the difference between the prices two farmers paid and the distance between their farms, showing where farmers located near each other paid significantly different prices for the same ag chemicals. ILLINOIS Five FBN farmers located in Illinois have reported prices for Roundup PowerMax in 2015 or One farmer paid $13.94 more than the farmer with the lowest price. $ ABOVE % ABOVE DISTANCE (IN MILES) FROM IL FARMER 1 $ % 65 IL FARMER 2 $ % 173 IL FARMER 3 $ % 175 IL FARMER 4 $ % 164 IL FARMER 5 $ % 126 CALIFORNIA Five FBN farmers located in California have reported prices for Roundup PowerMax in 2016 One farmer paid $7.75 more than the farmer with the lowest price, despite being located only 54 miles from the lowest paying farmer. CA FARMER 1 % ABOVE CA FARMER 2 $1.75 9% 50 7% CA FARMER 3 $ % CA FARMER 4 $ ABOVE $1.35 $ % DISTANCE (IN MILES) FROM CA FARMER 5 $ % MINNESOTA Five FBN farmers located in Minnesota have reported prices for Roundup PowerMax in One farmer paid 3$4.90 more than the farmer with the lowest price, despite being located only 46 miles from the lowest paying farmer. MN FARMER 1 $ % MN FARMER 2 MN FARMER 3 $ ABOVE $2.35 $2.48 % ABOVE 17% 18% DISTANCE (IN MILES) FROM MN FARMER 4 $ % 329 MN FARMER 5 $ % 46

5 CONCLUSIONS Regardless of state, region, or chemical purchased, farmers contend with significant differences in ag chemical prices. Price differences exist across the ag chemical industry, both for broadly applied chemicals like Roundup PowerMax and for more targeted products like Gramoxone SL. Price differences exist across the country for identical ag chemicals, with farmers in some states having access to identical products as farmers in neighboring states for less than half the cost. Price differences exist within states and limited geographical areas. For example, for two farmers within 46 miles of each other in Minnesota, one paid 36% more than the other for RoundUp PowerMax. THE FUTURE Farmers deserve transparent ag chemical pricing that s consistent across geographies, and access to more competitive markets for crop inputs. With more competition for their business and more price transparency, farmers will be able to make more informed decisions about how to best manage their input purchases. FBN will continue to offer information and insight on ag chemical prices. If you would like to contribute price data to these projects, you can do so directly by uploading a picture of your invoices to your FBN account or by sending it to data@farmersbusinessnetwork.com. As with all data submitted to FBN, we ll keep it confidential, anonymous, and secure. Gramaxone is a registered trademark of the Syngenta Group Company. Roundup PowerMax is a registered trademark of the Monsanto Company. Prowl, Status, Priaxor, and Sharpen are registered trademarks of the BASF Corporation. Laudis is a registered trademark of Bayer CropScience Global.

LOOKING FOR MORE INSIGHT ON YOUR AG CHEMICAL PRICES? KNOW MORE WITH FBN PRICE TRANSPARENCY When you add your ag chemical prices, you ll unlock pricing analytics on hundreds of popular crop inputs.

6 LOOKING FOR MORE INSIGHT ON YOUR AG CHEMICAL PRICES? KNOW MORE WITH FBN PRICE TRANSPARENCY When you add your ag chemical prices, you ll unlock pricing analytics on hundreds of popular crop inputs. Members can add prices by submitting images or PDFs of invoices or quotes to Your pricing information is always protected, confidential, and anonymous. We ll never reveal the price reported by your operation in any account except yours. NOT AN FBN MEMBER? Join Today at farmersbusinessnetwork.com.

TRANSPARENCY AG CHEMICAL PRICE FBN SM SPECIAL REPORT. Second Edition - Winter 2016

TRANSPARENCY AG CHEMICAL PRICE FBN SM SPECIAL REPORT. Second Edition - Winter 2016 FBN SM SPECIAL REPORT AG CHEMICAL PRICE TRANSPARENCY Second Edition - Winter 2016 1 (844) 200-FARM support@farmersbusinessnetwork.com 1123 Industrial Rd #200, San Carlos, CA 94070 www.farmersbusinessnetwork.com