FNA has built a system that can be largely explained as a six-point model:

1. Preferred suppliers

2. International sourcing

3. Direct-from-manufacturer pricing

4. Volume buying

5. Regulatory and policy application

6. Private labelling

• Preferred suppliers

Preferred Suppliers are at the heart of FNA programming. These are businesses that are committed to being producers’ partners rather than viewing them only as a source of profit for the input industry. The Member Benefits Guide details the many Preferred Suppliers and the specific offerings they provide to FNA members. Please be sure to use these suppliers, not only because it will save you money or provide other benefits, but because supporting those businesses that support producers is important to the long term goal of profitable agriculture.
The Guide is published periodically as a high quality,full colour gloss stock book with card stock covers. You can find a list of the Prefererd Suppliers on this site.

• International sourcing

We have proven that we can and we will go anywhere in the world to bring competition to the inputs you need. This year’s great example was our fertilizer program. FNA international negotiators went to Asia, found a supplier and negotiated a price. We brought in our own shiploads, put them on railcars and delivered to members at sidings. The delivered price of fertilizer was $40 - $50 per tonne lower than Canadian market. Of course, once FNA members started receiving their railcars, the Canadian industry responded and lowered prices for everyone. “They” did not want to see happen to fertilizer what happened to glyphosate, namely having 20% of their market share disappear to competitively priced FNA alternatives.

• Direct-from-manufacturer pricing

There are many manufacturers who want to be part of the farm profitability solution. At the same time they need to manage their margins against the competition they face in their own sectors. These manufacturers are willing to negotiate directly with FNA and provide pricing that is at or below wholesale. FNA saves them marketing and distribution costs so they can still earn a reasonable margin and FNA members get better pricing.

• Volume buying

Publicly FNA is most commonly known as a “bulk buying group” and this is, in part, true. By combining the orders of many producers we are able to negotiate volume discounts. This technique works in combination with others such as international sourcing and direct-to-manufacturer pricing to yield the best possible price. It is the weight of members working together that makes everything else possible. Which is why it is so critical to continue to recruit new members. Besides being a genuine service to them, every time we reach a particular plateau of orders for any given product, it allows another price decline.

• Regulatory and policy application

This is what we did with glyphosate. FNA’s regulatory experts identified a provision in law that allowed the import of competitively priced glyphosate. It was not being used because the cost for conducting lab testing was beyond the reach of any one producer. So FNA stepped in, did the lab work and navigated the regulatory regimes to get ClearOut 41 Plus certified for importation. The rest is history. But this is also an example of many techniques working together. None of it could have happened with the regulatory groundwork, but then our negotiators had to identify an international source that would engage in direct-to-manufacturer pricing and we brought to bear the full volume of our memberships needs.

• Private labeling

Private labeling is an arrangement where a manufacturer provides their identical brand-named product but puts your private label on it. This is done to protect the margins the manufacturer earns from his brand name while allowing them to earn additional sales among customers who are not motivated by the brand name. This is exactly what is happening with FNA lubricants. They are identical to a major national brand that every producer would recognize as in the top tier, but because it has an FNA label on it instead of its brand name, the savings per liter are very substantial.

Those six general techniques are the foundation for our input cost reduction mission. But, they are not the whole story. For example, the question was recently posed, “Does FNA distribute through third-parties or through its own distribution system?”

The answer is that we do both. We do not accept the traditional either-or, black-or-white choices that the mainstream seems to embrace. So if we can achieve greater cost reduction for members by handling the distribution ourselves, we will do that. We are doing that with ear tags, for example. But if it will cost us more to do it ourselves, or if the nature of the product is such that we cannot do it ourselves, we will gladly obtain the necessary third-party services. This applies to the entire distribution model. Where we can eliminate the need for intermediate warehousing, we will do so. Where we need local pickup points we will work with our own members and Preferred Suppliers to act as FNA Depots – and we have grown to more than 40 such depots across the country. So the answer to the either-or questions is almost always “both” or “whichever best serves the producers’ bottom lines.”