Although U.S. farmers are proficient at growing a variety of crops, at times they need help marketing and selling their goods. That is where AgWest Commodities comes in. AgWest is an agricultural commodities broker based in Nebraska that helps U.S. agricultural producers in several Corn Belt states effectively market and sell their products. AgWest founder and Chief Executive Officer Steve Knuth has worked in the agriculture industry since his early years in small-town Nebraska. Shortly after he graduated from high school, Mr. Knuth joined a fertilizer business that was owned by his brother. He worked there for over 20 years before deciding to pursue a career in agricultural commodities.
Mr. Knuth started AgWest in 1999 in the basement of his home in Harlan County, Nebraska. For the first few months, Mr. Knuth was the only employee. Over the next several years, AgWest grew rapidly. “I severely underestimated the possibilities of this business model,” he says. “We had pretty meager goals early on. Within a few years, we had 10 employees, and it just kept growing from there.” From 10 people working daily in Mr. Knuth’s home, the company has grown to 45 employees at its main office in Holdrege, Nebraska and branch offices in Colorado, Iowa, and Kansas. Mr. Knuth remains at the helm.
AgWest focuses on developing and implementing effective marketing and distribution plans for U.S. farmers. No two agricultural operations are identical, so each plan is carefully crafted to fit the client’s unique needs. “What really makes us unique is the guidance we provide to our clients in developing the plan. Then we take on the responsibility of making it happen as designed,” says Mr. Knuth.
The backbone of AgWest’s operation is a system of commodity analysis called Revenue and Profit Management, or RPM. RPM begins with a discussion between a client and an AgWest representative to determine the costs associated with producing a particular commodity. From there, a plan is developed with the ultimate goal of consistent profitability. “We preach consistency in profitability to help curb the often destructive emotions that can blow up good marketing plans,” says Mr. Knuth. AgWest has received positive feedback from both customers who use RPM for their marketing and their ag lenders. The proof of the concept is in the numbers: The RPM program has had an average retention rate of more than 90 percent for each of the last 10 years.
What sets AgWest apart in the agricultural commodities industry is the company’s willingness to shoulder the burden of executing marketing services on behalf of its clients. Because its clients do not always have the knowledge or technical skills required to fulfill the goals of an RPM plan, AgWest receives a limited power of attorney from its clients. The actions it takes to accomplish an RPM plan are predetermined and based on an agreement with the client; clients also always have the option of adjusting the goals of a plan.
AgWest is growing rapidly and is actively planning its vision for the future. In 2017, AgWest became involved in the agricultural land brokerage industry with the creation of AgWest Land Brokerage. Taking advantage of its experience in the agricultural commodities industry and its employees’ high level of integrity, AgWest hopes to continue providing critically important consulting services to U.S. farmers for many years to come.