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					Factors Tempting Big
Clients to Hire Their
Own Staff Agronomist
Prepared for 2008 Annual Meeting of Nebraska
       Independent Crop Consultants
     In Lincoln, NE, December 16, 2008

            By Dan Manternach
          Doane Advisory Services
   A Division of Vance Media Corporation
Doane subscriber poll results to the question:
Which of these reasons, in your view, is the most likely motivation
for a large farming operation for dropping a crop consulting
service and hiring its own staff agronomist?
    Acreage so extensive that the consulting firm’s fees are nearly as high as
     hiring their own agronomist and have his labor available for busy spring
     and fall planting season as a bonus. (48.1%)

    Having staff expertise to select and adopt the full array of GPS technologies
     in grid sampling, yield monitoring, variable rate pesticide and fertilizer
     application beyond what crop consultants can offer affordably. (29.7%)

    A sense that consulting firms are too quick to prescribe costly
     “preventative” measures for seasonal pest or diseases that may not have
     been necessary. (12.7%)

    A sense that consulting firms don’t have adequate staffing to spot yield-
     robbing pest or disease problems in a timely manner for quick response
     and least-cost control. (9.5%)


                                        2
Comments from crop consultants contacted…
Which of these reasons, in your view, is the most likely motivation
for a large farming operation for dropping a crop consulting
service and hiring its own staff agronomist?

 •   Speaking for myself, as a crop consultant gets
     older and has been working with established
     clients many years, we can become complacent.
 •   And that will leave us vulnerable to our largest
     growers either looking for another consulting firm
     or even hiring their own agronomist.
 •   This is why it’s so important that we network with
     other independent consultants, whether among
     our own company or at least within state and
     national organizations.

                                3
Comments from crop consultants contacted…
Which of these reasons, in your view, is the most likely motivation
for a large farming operation for dropping a crop consulting
service and hiring its own staff agronomist?
 •   Regularly attending the NAICC annual meeting has challenged me
     every year and encouraged me to stay up on how other successful
     consultants run their businesses throughout the U.S. and even
     internationally.

 •   Bluntly speaking, I think some of us spend too much time in duck
     blinds and deer stands instead of developing our skills
     professionally. We think we know everything important there is to
     know and there is no new stuff in our field.

 •   Our large, progressive growers pick up on such an attitude very
     quickly, even if we don’t think it applies to us. And with these big
     guys, perception is reality. It doesn’t matter if the perception is
     right.


                                    4
Comments from crop consultants contacted…
Suggestions for improving our service and minimizing risk of
losing a client to another firm or having them hire their own staff
agronomist:

 •   We have traditionally charged clients on a per acre basis.
     We need to get more creative with very large growers;
     perhaps on a “work done per day” basis where we ask what
     the grower wants, calculate how much time that will actually
     take, and price our service accordingly.

 •   We cannot give our service away. A good grower will
     recognize superior service and be willing to pay for it,
     provided we figure out how to document our performance in
     cost savings or yield enhancements, perhaps using small,
     untreated “check plots” in the corner of a field.


                                 5
Comments from crop consultants contacted…
Suggestions for improving our service and minimizing risk of
losing a client to another firm or having them hire their own staff
agronomist:



 •   I used to be proud of how each field or even parts
     of a field were treated differently. But I find large
     growers prefer one type of treatment to cover
     most of their acres.
 •   Thus, for these guys, we have to get away from
     the “crop scouting” mentality and see ourselves
     as total farm crop production and management
     consultants.

                                 6
Comments from crop consultants contacted…
Suggestions for improving our service and minimizing risk of
losing a client to another firm or having them hire their own staff
agronomist:

 •   Use one field reporting software program so reports can be
     e-mailed to clients. Some will want such reports also e-
     mailed to suppliers and dealers. Reason? Hand-written
     notes from the client are often missing specifics of our
     recommendations and as a result different rates or even
     different products get applied than what we recommended.

 •   Stay in touch with the client’s suppliers on a regular basis.
     See them as an “ally” in meeting the client’s needs
     precisely. Just because we’re “independent” doesn’t mean
     we should never darken the door of area suppliers and
     dealers to discuss the whole range of their products and
     programs. Large clients will expect us to know that, not be
     asking THEM about what’s available to them!

                                 7
Comments from crop consultants contacted…
Suggestions for improving our service and minimizing risk of
losing a client to another firm or having them hire their own staff
agronomist:

 •   Growers will do business with whom they trust,
     whether an independent crop consultant or the
     becoming-more-prevalent seed
     dealer/consultants. The lasting relationships take
     time to develop and it includes relationships with
     the spouses, the kids and even the hired help.

 •   Use this to your advantage because many of the
     younger “newbie” consultants don’t appreciate
     the time and importance of this.

                                 8
Comments from crop consultants contacted…
Suggestions for improving our service and minimizing risk of
losing a client to another firm or having them hire their own staff
agronomist:

 •   I often equate crop consulting with coaching college sports.
     Tom Osborne would not be revered in Nebraska if he hadn’t
     won football championships in the latter years of his
     coaching career. How many coaches would have been fired
     after several losing seasons, even after winning a
     championship years earlier?

 •   When it comes to these big clients, we have to ask for the
     business on a yearly basis and never EVER take a big
     client’s renewed business for granted. For these guys,
     “What did you do for me last season?” has become far
     more important than “What have you done for me over the
     last 5 years or so?”


                                 9
Comments from crop consultants contacted…
Which of these reasons, in your view, is the most likely motivation
for a large farming operation for dropping a crop consulting
service and hiring its own staff agronomist?

 1) We have NOT had many growers hiring their own
    agronomist and then dropping us. Just one experience so
    far. But we do see it as a threat and are trying to address it.

 2) However, growers often ASK our consultants to quit and
    come work for them, but so far we’ve been able to retain
    staff.

 3) We have found a “threshold” of about $30,000 in annual
    billings as the point where our clients “look at us a little
    differently and start to expect services above and beyond
    our basic offerings.

                                 10
More comments from crop consultants contacted…

 Growers we find “most likely” to hire their own staff agronomist:

 •   Large, prosperous operators who have used consultants for
     several years in the past, successfully.

 •   Large operations short handed on full-time labor as it is.

 •   Operations needing better information management in general and
     reason that an agronomist has computer skills necessary to
     provide that function as well.

 •   Operations where the owner deducts the value of the staff
     agronomist’s labor beyond his role as the farm’s agronomist from
     his actual salary cost when comparing to consulting costs.




                                   11
More comments from crop consultants contacted…


 I think we can still be involved at a high level
     even for operations that have their own
     staff agronomist:

 •   No single agronomist can be on top of all new research and
     technology available. The more combined technical
     expertise a grower has access to, the better. Consultants
     could work WITH staff agronomists.

 •   Growers interested in hi-tech GPS farming can find that
     expertise among folks without agronomy degrees; maybe
     even better qualified in that area specifically, for just a little
     more than general farm laborer salary.


                                   12
More comments from crop consultants contacted…

 I think we can still be involved at a high level even for
     operations that have their own staff agronomist:


 •   Yes, the staff agronomist can certainly perform many of the
     functions we currently do, but then WE might expand our own
     service offerings to OTHER needs the grower may have; such as
     helping him explore specialty crop economics.

 •   We may need to adopt a more variable pricing model for our
     services, but offer specific discounts for services the staff
     agronomist can perform and then offer even better service in
     those tasks still left to us by the client.




                                   13
More comments from crop consultants contacted…

 We need to tactfully show clients how they can underestimate
    the true cost of having a staff agronomist:

 •   They often have unrealistic expectation of what salary it will
     take to hire a fully qualified, degreed agronomist.

 •   The person they hire will often be a fresh college-graduate
     just looking for an entry-level job and short on experience
     in practical applications of what he has learned.

 •   The entry-level farm staff accountant will likely leave in a
     few years to start his own business or join a consulting
     firm.

                                 14
More comments from crop consultants contacted…

 We need to tactfully show clients how they can underestimate the true
    cost of having a staff agronomist (continued):

 •   Costs for insurance, benefits, a pick-up, testing, training and
     professional meetings are often overlooked.

 •   They often have unrealistic expectation of what salary it will take
     to hire a fully qualified, degreed agronomist.

 •   The person they hire will often be a fresh college-graduate just
     looking for an entry-level job and short on experience in practical
     applications of what he has learned.

 •   There’s a temptation to add so many farm-tasks outside of
     agronomy that the staff agronomist doesn’t have time in busy
     seasons to do as good a job as the consulting firm would.


                                    15
More comments from crop consultants contacted…


 We need to tactfully show clients how they can
   underestimate the true cost of having a staff
   agronomist (continued):

 •   There is a cost of not networking with other
     agronomists that you have in a consulting firm.

 •   It’s tougher for a staff agronomist working for one
     farm to keep up with all the latest research,
     technology and ideas that come our way as
     professional consulting

                            16
More comments from crop consultants contacted…

 For those in your survey who chose “A sense that
    consulting firms are too quick to prescribe costly
    “preventative” measures that may not have been
    necessary:

 •   I don’t think this is a legitimate issue except for a
     very few in our profession. IPM minimizes risk,
     but does not eliminate risk.

 •   Hindsight is always 20/20. Anybody can look
     backwards and declare that a treatment was
     “unnecessary”. Clients have a tendency to do
     that.
                             17
More comments from crop consultants contacted…

 For those in your survey who chose “A sense that
    consulting firms are too quick to prescribe costly
    “preventative” measures that may not have been
    necessary:

 •   I’ve been consulting for 28 years and have seen
     many things work that “shouldn’t have worked”
     and many things fail that should have worked.

 •   We can always be second-guessed, after the fact,
     but we have to work with the data, the weather
     and the situation we face at the time a decision
     must be made.
                            18
More comments from crop consultants contacted…


 For those in your survey who chose “A sense that
    consulting firms are too quick to prescribe costly
    “preventative” measures that may not have been
    necessary (continued):

 •   A consulting firm has the manpower to meet your
     needs even if your assigned consultant takes ill
     or has a family emergency during a critical
     scouting season.
 •   We pay our consultants very well. You get a
     seasoned professional as a result and don’t have
     to settle for an “affordable” new college graduate.
                            19
More comments from crop consultants contacted…

 For those in your survey who chose “A sense that consulting
     firms are too quick to prescribe costly “preventative”
     measures that may not have been necessary (continued):

 •   We show our clients convincingly how the return on their
     investment in our services is at least 5 times and often 10
     times or more the cost we bill them.

 •   We show our clients how the time savings and risk
     management they don’t have worry about themselves is a
     bonus value they won’t necessarily get with a younger, less
     experienced staff agronomist they’ll feel a need to check up
     on and get “second opinions” on his recommendations.


                                20
More comments from crop consultants contacted…

 There is a book called “The Paradox of Excellence” that basically says “the
     better job you do, the more transparent you become and the less you are
     appreciated.”

 •   Translation: If we are solving all our clients’ problems and taking all the
     roadblocks out of their way and everything is going well, then it looks very
     easy and the grower doesn’t realize all the little decisions, thoughts,
     experiences and timing that goes into a successful “Systems Approach.”

 •   Then, the more we are taken for granted, the more they might consider
     hiring their own person to perform our functions and provide labor as a
     “bonus”.

 •   Conclusion: It’s not really our nature, but we SHOULD try to “blow our own
     horn” once in awhile to make sure the client is AWARE of all we do on their
     behalf “behind the scenes” back at our offices or even out scouting in their
     fields that they don’t even see.




                                       21
More comments from crop consultants contacted…

 Among additional services we consultants could add for large scale
    clients to retain their business and discourage them from hiring
    their own staff agronomist:

 •   We need to make sure we are much more than “just a crop scout”
     that alerts them to problems, but problem SOLVERS in ways
     where we earn our keep in cost savings and extra yield.

 •   Our very large clients probably expect extra services that are
     exclusive to them on account of the amount they spend with us;
     starting at $25,000 and up.

 •   Consider sponsoring outlook and management conferences
     exclusively for large scale clients who love to mingle with their
     “peers”.



                                    22
More comments from crop consultants contacted…

 Among additional services we consultants could add for large
   scale clients to retain their business and discourage them
   from hiring their own staff agronomist:

 •   We need to present such clients with new management
     ideas across the gamut of farming that they may not be
     aware of; even tax management or marketing concepts we
     don’t profess to offer ourselves, but serve as the client’s
     “eyes and ears”, always concerned with their success at
     every aspect of farming, not just agronomy.

 •   Organize FSA maps, yield maps, disease and pest problems
     encountered, steps taken to avoid or mitigate in a year-end
     summary book that becomes part of the farm’s permanent
     records.


                                23
More comments from crop consultants contacted…

 Among additional services we consultants could add for large
   scale clients to retain their business and discourage them
   from hiring their own staff agronomist (continued):

 •   Prepare a chemical and pesticide shopping list that helps
     the client find the best deal on products we’ve
     recommended.

 •   Offer more “information management” counsel to help the
     client better organize, analyze, and retain historical data for
     future decision-making.

 •   Offer field enterprising; where each field is evaluated as a
     separate enterprise; best crop choices, best rotation
     schedule, etc.

                                 24
More comments from crop consultants contacted…

 To show our concern about performance and accountability;
     our desire to provide large clients excellent value they won’t
     get with a staff agronomist unwilling to ask such “loaded
     questions”, we should schedule a “de-briefing” meeting at
     the end of the season with the client and his staff of hired
     help to ask THEM:

 •   What went well in their view?
 •   What went poorly in their view?
 •   What can we do differently to meet and preferably EXCEED
     their expectations next season?
 •   What additional services will they be expecting from us in
     the future?


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