July 10, 2004

High-tech Venture Keeps Farmers on Top of Market

Kyle Stock  /  Post and Courier

Charleston-based QuickFarm Nears Fifth Anniversary

Every weekday, masses of traders descend into the dim pits of the Chicago Board of Trade to do battle, swapping the right to buy and sell the harvest of American farmers. Fortunes are made and lost in seconds when a tornado touches down in Iowa or a storm cloud boils up and releases its weight of water. And the traders, most disheveled and nervous men in mesh vests, gladly fork out the occasional $500 fine for the pleasure of punching out the competition – literally.

This is how the larder of America has made its way from field to fridge since 1848. It's one of the last open outcry trade systems in the world, a frenzied daily scrum that stops and starts with the ringing of a bell.

There's a similar bell at the two-story QuickFarm Inc. building on upper Meeting Street in Charleston. QuickFarm is in the business of developing 21st-century technology to empower farmers and help them get better prices for their crops.

The place is quiet, colorful, well lit and a long way from the Corn Belt or the trading pits of Chicago. But its bell rings whenever a new customer is signed up. In the close to five years that QuickFarm has been in business, the ringing has been steady. "As long as the market stays available to them, they should survive and grow," said Dean Kohlmeyer, a grain manager for StateLine Cooperative, a grain elevator in Iowa that is a QuickFarm client.

QuickFarm has carved out a unique niche in the relatively small space where the agriculture and technology industries intersect. The company designs and updates Web pages for grain elevators, feed mills and cotton gins – places that act as a middleman between farmers and big distributing companies such as Cargill that have their own traders in the pits.

The portals set up by QuickFarm are sort of a one-stop shop for those who reap and sow. They provide real-time spot and futures prices on commodities and weather updates and reports from the U.S. Department of Agriculture and the Chicago Board of Trade. QuickFarm also hosts personalized Web sites for farmers who keep track of their crops the same way a bank Web site tracks a checking account online. With a username and password, a farmer can see how much of each crop has been sold, how much is left over, what produce has been delivered and what is still sitting on the farm.

"We see ourselves as the person that puts it all together," said QuickFarm's founder and chief executive officer, Mason Pope. "The whole product that we're going to ultimately provide the farmer is much greater than any one service."

QuickFarm collects anywhere from $2,000 to $10,000 a year for each of its portals. It pockets an additional $4,000 to $30,000 annually from each grain elevator, feed mill and cotton gin that chooses to offer farmers QuickFarm's portfolio-management features. Just a few years ago, farmers would have to call their brokers or drive down to the grain elevator to see what the market was doing and decide when and how to sell their harvest.

Grain elevators had big, bulky and expensive satellite uplinks that would pick up the numbers coming out of the markets. Now, thanks to QuickFarm and similar companies, farmers can get most, if not all, of the information they need on their PCs. If they've got the right equipment, they can check prices and sell their entire crop from the seat of a tractor as they drive out to start harvesting.

"We're 'farmer-centric,' " Pope said. "We're always looking out for the best interest of the farmer, and we're always transparent." QuickFarm will hit its five-year mark in a matter of weeks. It's a privately held company and won't make public most of its financial results, but Pope said it has realized steady revenue growth since its inception, and the staff has increased from two to 15 employees.

About 50,000 farmers now access QuickFarm-administered Web pages in the United States, Canada, Europe and Australia. QuickFarm is one the area's lesser-known success stories. It has quietly made its way in the market in recent years as economic development professionals and lawmakers beat the drums to court technology and knowledge-based companies.

Ernest Andrade, who heads up the Charleston Digital Corridor initiative, said QuickFarm is exactly the kind of company he's seeking to attract and nurture. It sells smarts and information. It employs young workers. And it doesn't pollute or suck up a lot of tax-funded services.

The truth is, QuickFarm could be growing faster if it had headquarters in the Midwest. Its biggest competitor, Data Transmission Network Corp., is based in Omaha, Neb. But Pope, who is from the Midlands and started his career on Wall Street, wanted to live in Charleston. He got in touch with his best childhood friend, Kirkman Finlay III, in the late 1990s when he felt that he had accrued enough business knowledge to launch a startup – any kind of startup. Finlay, who is the latest generation in a long line of farmers, sold Pope on agriculture.

Like a lot of farmers, Finlay was tired of relying on his broker for advice and information. He also saw a chance to make farmers more efficient. "You've either got to get bigger and develop economies of scale, or you've got to be a part-time farmer," Finlay said. "That's what QuickFarm is designed to serve. ... What it really does is save a lot of time."

Pope and a small staff slowly built a nationwide customer base by phone and mail. Jeremy Frey, IT manager of Iowa-based grain elevator Great Lakes Coop, was skeptical when he found out QuickFarm was based in Charleston. "I thought it was kind of strange, but they're on the ball with what they're doing," Frey said. "Their customer service is better than just about anybody I've worked with."

Great Lakes Coop switched to QuickFarm from its major competitor and cut IT expenses from $34,000 to $9,000. A fair number of its 3,000 farmers are now paying $65 a month to track their trades with QuickFarm.

Kohlmeyer's StateLine Coop also switched to QuickFarm from a more expensive satellite-based service. He said the company's response time is faster and the coop's Web site is better and more individualized than its competitors' sites.

Although QuickFarm's growth has not been threatened by any major market storms, it has pushed through a number of obstacles to stretch to its current size. The biggest challenge to date has been convincing farmers how the technology can help them. When QuickFarm launched in 1999, only about 20 percent of U.S. farmers used the Internet. Pope often recounts a story about delivering a sales pitch at a trade show in the Midwest. One farmer asked him to slow down, commenting, "We're still getting used to them making yellow legal pads white."

Today, about 60 percent of U.S. farmers are online, a much more fertile business landscape for QuickFarm. The company is working on developing more news feeds, and the proliferation of broadband will let QuickFarm sell more and bigger Web services. Finlay said the growth opportunities are "almost limitless."

Pope has no immediate plans to sell the company or float shares to the public, but he does aspire to the success of Charleston's heavyweight tech companies, such as Blackbaud, Automated Trading Desk and BenefitFocus. "The highest levels of innovation traditionally occur at the most unrecognized companies," Andrade said. "I think QuickFarm is in that very innovative space."