“Production pays the bills. Marketing makes the money.”
My Grain Exchange Ltd., or MGX, is an online marketplace rooted in Saskatchewan agriculture. Founder Merv Berscheid, owner of CGF Brokerage, saw the inefficiencies of the traditional marketing system and had a vision for a digital platform that boasted price transparency and easy market access. MGX is the end result of that vision.
“The first iteration of MGX was based on an auction system where producers could upload their inventory and then set time-based reserved or unreserved auctions,” says operations manager and customer service representative Luke Derkson. “The new MGX is based on a marketplace structure similar to Kijiji or AutoTrader. It's like any online marketplace in the sense that it puts your grain in front of more buyers with very little need for ongoing management.”
The program’s goal is to give users visibility into local on-farm inventory, actual market prices, and real demand trends, while expanding selling opportunities for farmers. Derkson states that the company has worked hard to ensure that the site is both secure and intuitive. Users remain anonymous to each other until a deal is made, and a buyer management dashboard lets farmers opt out of doing business with companies they don’t know or aren’t comfortable with. It even has a chat feature.
“Essentially, what we're trying to do is harness the practicality of passive marketing. Farmers can add their inventory or their new crop acres and let buyers browse and make offers on it. So there's no pressure to sell, they can negotiate the deal they want, and it takes the work out of chasing down cash bids and comparing prices. It also allows the buyer to find the grain that they're after quickly and very efficiently.”
The MGX team is based throughout the Prairies, with all development happening in Saskatoon in Saskatchewan. Nothing gets outsourced, which enables the company to carefully curate the platform, ensuring that development goals match the goals of Canadian grain buyers and sellers. Investors are either farmers or people who work in agricultural spaces.
“Our culture is largely driven by the common goal to bring the marketing side of farming up to date with in-field innovation,” Derkson shares. “It’s our belief that Canadian farmers are amongst the greatest producers in the world, and they deserve a platform that allows them to leverage their assets more efficiently.”
Recent updates for improving interactions were the removal of the mandatory sample analysis and improvements to the buyer’s dashboard, where bids are placed pending sample approval. The company observed that these shifts allowed producers to expedite the listing process to take advantage of market fluctuations, although they still believe that knowing your grade prior to entering any trade is the best way to market.
“That said, we still offer the verified sample program through our partnership with SGS to support farmers who want that data,” Derkson says. “However, in recognition of how contracts and deals are traditionally made, we wanted to allow for more flexibility in the process.”
Derkson states that, because MGX is a new platform that breaks tradition, a lot of their users are early adopters and producers who are looking for new and innovative ways to run their farming operations.
“We found a real connection to producers that are wanting more control of their marketing process and access to larger markets outside of the local area,” says Derkson. “We've also found a huge uptake with buyers- they're very hungry for this, as it allows them to find and bid on large amounts of inventory in a matter of minutes, where usually a buyer would be spending hours making phone calls or sending text messages.”
MGX’s vetting process ensures that only reputable local companies can place bids on the platform, which currently has over 40 active buyers from Saskatchewan and Alberta. Over half of those buyers are licensed or bonded with the Canadian Grain Commission (CGC), or are feed companies that don’t require licensing.
By listing on MGX, there is no commitment to sell through MGX. Derkson emphasizes that the inventory management tool and marketplace listings are available to users for free- the only cost is a $3.50/metric ton transaction fee when sales are made.
“We recognize that many farmers currently make deals based on trust, prior relationships, and handshakes,” says Derkson. “MGX has put a lot of effort into vetting our buyers, and we’ve added a user rating system, allowing the community to weed out parties that aren’t operating in good faith.”
Like offline sales, MGX depends on buyers and sellers crafting fair and legitimate contracts, and then executing them based on the details that were agreed upon. Essentially, the user rating system provides some transparency into an otherwise anonymous marketplace and makes everyone accountable in regard to their end of the deal.
“We aren't trying to reinvent the wheel,” Derkson emphasizes. “We're positioning ourselves in the market to simply be a tool for all existing marketing processes to use and take advantage of more price intel. I would actually suggest that our main competition is the status quo. And one of the biggest shortfalls with the current system is the lack of data and transparency into the local market here in Canada.”
Looking ahead, MGX is currently working on a portal to allow brokers and advisors to use MGX on behalf of their clients. They also hope to expand their organics marketing program to include certified seed and hay.
This format has been successful in Australia and the UK.
“As our marketplace grows, we see MGX as a no-brainer for both sides.”
MGX is currently waiving the service fees for all seller accounts until September- learn more on the MGX website.