In the 1920s, livestock producers discovered a little “protein pill” known as the soybean. This little bean quickly became a go-to option for protein content in animal feed formulas. This meant that the cost of soybeans were determined by one thing: the protein content. For a time, there was no tangible issue with this trading model — the higher the protein, the higher the cost.
However, recent studies and the experience of Genesis Feed Technologies co-founder Matthew Clark found this to be an erroneous trading standard — one that has cost the industry millions of dollars to correct.
They were right about the protein content, Clark posited, but what they didn’t realize is the crucial importance of amino acids and energy as well. This “protein-first” emphasis built a trading standard that the industry has spent decades and millions of dollars to correct. It didn’t just affect soybeans. Other ingredients — including corn, distillers grains (DDGs), wheat, and full-fat soya have been victims of this method of trading.
The result? The real value of the ingredients is lost and everyone from the grain farmer to the animal producer loses money. And how to solve this problem?
“It was an accident.”
At least, that’s how GFT co-founders Matthew Clark and Peter Schott describe the initial beginnings of a solution they now call the Nutrient Value Calculator.
The initial idea was born out of a phone call between Matthew and Peter, two ag-enthusiasts with a hankering for innovative ideas. Peter was working at a mobile technology company at the time, and having spent his career working in agriculture, he was interested in ways mobile technology could be utilized in ag. Matthew was in the midst of one of his tries at retirement, while also running FeedGuys, his consulting an IT solutions business for the animal and feed industry.
The two knew each other through Peter’s work at Cargill over the years. It had been some time, but when Matthew saw the call while at his home in Malaysia, he picked up.
“Out of the blue, he called me. I don’t know how he found me, but he did,” Matthew says with a chuckle. “He was looking for some mobile technology projects within the ag industry, and I was helping a client get back on track by understanding and managing the cost of their feed.”
Matthew explained that his client had made “disastrous decisions” in buying raw materials. When the margin for feed businesses hover between 2 – 4%, he said, “you absolutely must know your cost.”
“We had a web platform, and I just happened to be sitting down looking at all this code,” he said. “We were an ideal candidate for a mobile solution.”
Matthew and Peter began discussing what it would look like to create a platform that would help feed buyers find the most cost-efficient way to meet the nutritionist’s formulas. They brought on Phil Reindl, a long-time friend of Peter and software developer with 30 years of experience.
“One day, Peter asked if I was interested in a little side project,” Phil said. “Next thing you know it was a whole company.”
The company is Genesis Feed Technologies, and what they’ve built is a platform called the Nutrient Value Calculator. This is a platform that uses data gathered from boots on the ground all across the globe. GFT works closely with industry partners in over 17 countries to keep everything up to date. When making purchasing or marketing decisions, it’s critical to understand the feed ingredient usage, ingredient price, and formula composition for each region. Seemingly minor differences in these numbers can lead to large changes in the ingredient value.
Ingredient buyers can now use the Nutrient Value Calculator for immediate access to cost analysis data. This data, which takes hours to manually compute, allows buyers to make smarter purchasing decisions and save their enterprise up to $25/tonne on soybean meal purchases and $3-$5/tonne on feed costs. Today, the Nutrient Value Calculator is already being used in countries from China to Peru.
“I speak with ingredient buyers around the world on a daily basis. Two things ring true from the conversations,” Schott said. “First, there is a desire and need for alignment between purchasing and nutrition. Second is a misunderstanding of the basis spreads between soybean meal origins. Both of these problems are costing companies greatly and they usually don’t realize the impact it has on their bottom line. Using the Nutrient Value Calculator is eye opening and a valuable experience for them all.”
However, as with any startup journey, developing Genesis Feed Technologies has not come without its fair share of trials and iterations. At first, the platform existed as a complicated Excel document, one that Matthew had been building for years. Matthew then turned it into a desktop application, and with Phil’s help, they pivoted to launching it as a web platform.
“Presenting the data was the problem. We had various A-ha moments where we hit things that really did work for a limited number of people, and things that didn’t,” Matthew said. “This is the trick in business—understanding what is a single customer reaction as opposed to a trend.”
Despite the setbacks, they forged ahead with full belief that what they were building was on the right track. As Matthew put it, “Where common sense fails bloodyminded optimism prevails.”
Sure enough, with the launch of the refined Nutrient Value Calculator in 2014, the ag industry began taking notice. It wasn’t long before they partnered with the U.S. Soybean Export Council and began connecting feed enterprises from around the world with the GFT software.
As the new software is implemented, feed enterprises are seeing an ROI of up to 3% of their income. Ingredient buyers and nutritionists are able to work together, rather than operating with separate goals. Today, GFT partners with over 17 different countries who are using the platform.
“When we first built the platform, I was really focused on the calculator we built for decision-making,” Peter Schott said. “But what I get really excited about now is we have this network of market intelligence data from around the world built into our platform. People from all these countries that are important to US Soy Exports are updating the ingredient prices, formulations, and ingredients being used in this platform on a regular basis. I get really excited about the possibilities of what that can do, combined with the tools we’ve created to take advantage of that data.”
Ultimately, Peter, Matthew and Phil are dreaming up a world where the interaction from grower to ingredient buyer is a seamless funnel of direct communication, where ingredients like soybeans are traded based on their complete nutritional value — not just protein.
Peter paints this picture: “Imagine a world where a farmer is harvesting his crop, at a premium quality, and he gets a notification from an ingredient buyer that they would like to purchase that crop at a premium price. They recognize that the crop is highly nutritious, and they are willing to pay more for that premium. The farmer accepts the offer, and the crop is purchased before the farmer’s even left the harvest.”
Naturally, as any farmer knows, working in the ag industry requires flexibility and adaptability. As the GFT team continues to grow their platform, they understand that it must eb and flow with the demands of the industry. But one thing will remain — a commitment to leading agriculture into a future of technology and innovation, by providing solutions that save feed enterprises money, and provide better, more nutritious products for the world. “We have to remain flexible and move with the industry requirements. Problem awareness. Industry trends. I believe we are equipped to do that,” Matthew said. “I very much believe that what we’re doing with GFT is the future.”
Learn more at genesisfeedtech.com.