The Day the Grain Marketplace Died

Mark Johnson
7 min readOct 12, 2021

Agriculture is the biggest industry that Silicon Valley has failed to disrupt. Despite billions of dollars going into high-flying AgTech software startups like Farmer’s Business Network (FBN) and Indigo Ag, there hasn’t been a single industry-changing success since Climate Corp a decade ago.

A favorite model of the biggest AgTech companies is the hallowed marketplace, the great disruptive tool of the digital era. Think Amazon, eBay, Kayak, AirBnB, and Uber. In agriculture, all such attempts at building a marketplace have failed miserably.

I declare October 12, 2021 as the day that the grain marketplace died.

Why? Because today, we announced that GrainBridge has been acquired by Bushel. Not only will Bushel inherit GrainBridge’s team and data refinery, it also secures two customers, ADM and Cargill, the two largest grain buyers in the US.

Bushel’s business model isn’t a marketplace. They are creating the digital infrastructure for the agriculture industry. Instead of trying to disrupt, they’re bringing agriculture into the digital era.

I don’t come from an agriculture background. It’s taken me over a year at the helm of GrainBridge to figure out why agriculture is so resilient to disruption and why marketplaces aren’t tenable. I’ll try to unpack the bombastic statement above by first teaching you some key points about grain markets. Then, we’ll use that knowledge to show why grain marketplaces don’t solve problems and finally, how Bushel represents an alternative vision.

A primer on grain markets

The term “agriculture” is unfortunately broad. For the purposes of this article, I’m talking about grains in the US: corn, soy, and wheat being the three biggest crops. The bulk of these row crops are in the midwest. For example, Illinois and Iowa produce about 26% of soybeans and the top four corn states produce 56% of total production. Corn is grown in about equal parts to produce sugar, ethanol, and feed; soy is grown mostly for feed and the oil it produces; wheat is grown mostly for food. Each of these crops is a commodity. That is, corn produced in a field in Iowa should be the same as corn produced in a field in Nebraska. Importantly, grain is exported. The US exports about 50% of its soy crop. The US agricultural system literally feeds the world.

With tens of billions of dollars of crops grown, you can imagine VCs and entrepreneurs drooling a massive Total Addressable Market (TAM). Marketplaces have disrupted other traditional industries, why not build one for agriculture?

To understand why that won’t work, we need to understand the basics of farming.

Hundreds of thousands of individual farmers across America own their own business. They lease or own their land, manage their equipment, buy inputs (seed, fertilizer, etc.), and sell their grain. Unlike speciality crops like strawberries, where buyers will often contract with growers, grain farmers choose what crop to plant independent of there being a buyer and will sell it at the time of their own choosing.

Since grains are a commodity, the price fluctuates on national commodities marketplaces, like the Chicago Board of Trade. These futures contracts are a promise to deliver grain at some point in the future. Farmers watch the prices and try to sell when the price is high. This is called grain marketing, a term of art for a farmer selling his grain or… “bringing it to market.”

The farmer sells to a local storage and distribution facility called a grain elevator (though sometimes it’s a processing facility, like an ethanol plant). Transporting grain to a facility has a transportation cost, so there are only so many buyers within a reasonable range, limiting potential buyers to any given farm to a ~35 mile radius.

The buyers at the grain elevator need to make money, so they set a price for storing and handling the grain, called basis. Typically negative, the basis is added to or subtracted from the futures price to arrive at the price the farmer gets paid, the cash price.

A farmer typically has grain storage, called bins, on his farm. That means that he doesn’t need to harvest his crop and take it directly to the grain buyer. Harvest is often the worst time to sell grain, because with supply very high, prices will typically dip. So, the farmer can enter into a contract to deliver later on, say January 2022, when the price might be higher.

And, it turns out that each of those delivery months has a different price that fluctuates independently. Now things are really getting complicated. How these prices fluctuate doesn’t really matter. The point is that a farmer — while he’s trying to tend to the other parts of his business, like growing his crop — also has to worry about corn prices, which move due to everything from monetary policy to trade wars.

Corn prices for different delivery months at the ADM Decatur facility.

I only scratched the surface of grain marketing and simplified some of the concepts. Don’t worry if you didn’t make a lot of sense to you, even farmers who have been selling grain all their life can find grain marketing challenging.

For the rest of the discussion, there’s really only two things you need to know:

  1. There are only so many possible buyers in a region, due to transportation costs.
  2. There are only so many farmers in a region and a grain buyer likely knows all of them.

Grain marketplaces: solving the wrong problem

The first grain marketplace,, was launched with fanfare back in 2000 during the original internet craze. In reading this article from the WSJ upon launch, a lot of the theory made sense. After all, farmers are rural and it would be hugely advantageous if they could conduct business online. Change a few details in the article and you could probably raise a seed round with that business plan today. sadly succumbed to the rash of internet startups that died after September 11, so we never know if it would have evolved into something else.

Fast forward to today and there are a whole number of marketplace style startups. Some, like FBN, have expanded from their original marketplace vision and are trying to create a comprehensive experience for the farmer, from crop inputs to farm management. Others, like Indigo Ag, built a marketplace, made some missteps, and is doubling-down on the marketplace as per this recent article by Jacob Bunge at the WSJ.

I wish all of these companies the best of luck — lord knows that I’m not always right in my prognostications, but I would like to call out a huge cautionary note: marketplaces don’t solve problems for the farmer or the grain buyer.

On the farmer side, you may already anticipate where I’m going from the explanation of grain marketing above. The farmer only has so many local buyers and the price is mostly determined nationally. The farmer’s biggest problem is making a decision: when’s the right time to sell grain? Picking the right time could be the difference between squeaking by and having a great year.

In fact, that’s exactly why ADM and Cargill decided to form GrainBridge back in 2018. They wisely saw too much venture capital going into marketplaces and wanted to help farmers become more profitable. The idea was to pool data about farmer selling behavior into GrainBridge and build a decision support application that would give farmers unbiased advice on when to sell grain. The platform would then attract other grain buyers, creating data gravity, and ultimately being a necessary tool for the farmer to make smart grain marketing decisions.

On the buyer side, marketplaces theoretically give you access to new customers. That’s the power of something like Amazon for a small vendor. But, a grain elevator typically knows all of the local farmers. They’re not going to magically discover a massive farm that they didn’t know about. Their challenge is how to stay in touch with farmers and to gain more visibility into when grain is going to arrive at their facility.

So, neither buyer nor sellers want a marketplace. What do they want?

That’s where Bushel comes in. Digitization has always been the challenge of AgTech. Most grain buyers are running on ancient grain accounting systems that weren’t meant to be on the internet, some of them running on hardware that would have been considered antiquated in 2000, let alone in 2021. That meant that many grain buyers had trouble digitizing the basic transactional documents between them and their farmers. And that’s where Bushel came in.

Digitizing infrastructure isn’t sexy, it’s really hard work. There’s a huge payoff though if you can create the digital platform for innovation in AgTech. Leaf’s G. Bailey Stockdale last week wrote a great post about the interplay between apps and infrastructure. My response on Twitter was that I don’t see enough companies focused on platforms in AgTech.

I believe Bushel’s hard work and sweat put into digitizing this formerly paper processes will be the foundation that launches them to become the most innovative company in AgTech. (Oh, and ICYMI, Bushel raised $50m earlier this year and added a few major customers.)

A parallel is Amazon versus Shopify. Grain marketplaces have been trying to build the Amazon of grain for a long time, while Bushel quietly built the Shopify of grain. Every grain buyer wants their own storefront, their own customer relationship management, and their own analytics. That kind of customization is where Bushel shines. Each grain buyer can create a customized experience for their farmers; and farmers now have a standardized digital interface for what used to be a paper process. Everyone wins.

Walt Duflock once asked why there isn’t an eBay in agriculture? My answer is: we don’t need one.



Mark Johnson

CTO of Stand Together. Former CEO of GrainBridge, Co-founder of Descartes Labs, CEO of Zite. Love product, philosophy, data refineries, and models.