North Carolina-based XS, Inc., the parent company of XSAg.com, announced today that it has secured $20 million (US$) in financing to develop an auction site that will help beleaguered American farmers buy agricultural goods at discount rates.
XS plans to use the funds to expand its marketplace and increase awareness among the 350,000 producers and American farmers that it says will benefit from buying and selling goods on its site.
XSAg.com started by selling fertilizers and seeds and will soon be offering farmers equipment, parts and veterinary products. The company said that manufacturers, distributors, dealers and growers will be able to conduct secure transactions in total anonymity on the site.
Fulton Breen, the company’s founder, said that XSAg.com can assist American farmers in combating depressed prices for their crops by allowing them to buy goods at reduced rates.
“By using the efficient trading floor model, growers can take control of their crops, and by extension, their lifestyle,” said Breen. “The grower is much more motivated than a corporate purchasing agent to adopt Internet technology to save money. The grower is the CEO of his company. He’s experiencing depressed crop prices, he understands the auction model and he must cut costs to stay in business.”
Farmers Take To The Internet
Contrary to popular perception, American farmers have gravitated to the Internet. Breen reportedly discovered through research that 75 percent of American farmers who bring in more than $250,000 annually use the Internet.
Farmers are suffering through one of their worst periods in recent memory. Climatic events like drought and floods have coupled with sinking prices to drive farmers to the brink.
In fact, President Clinton recently signed a massive aid package for farmers and another one is likely next year.
XSAg.com says it saves farmers 30 percent or more by acting as a neutral market maker. The company takes 2 percent of the sales price as its fee and also offers discounted freight, credit facilities and transfer of funds.
Breen reportedly has signed up 10,000 American farmers and has his sights set on many more.