Ag Services of America, Inc. | Introduction
Introduction
1309 Technology Parkway
Cedar Falls, Iowa 50613
U.S.A.
Telephone: (319) 277-0261
Toll Free: (800) 395-8505
Fax: (319) 277-0144
Web site: http://www.agservices.com
Public Company
Incorporated: 1985
Employees: 158
Sales: $197.9 million (2002)
Stock Exchanges: New York
Ticker Symbol: ASV
NAIC: 422910 Farm Supplies Wholesalers
With its headquarters located in Cedar Falls, Iowa, Ag Services of America, Inc. (ASA) provides financing, products, and agricultural-related services to farmers located in 38 states. Primary customers are corn and soybean producers in Illinois, Indiana, Iowa, Minnesota, Nebraska, North Dakota, Ohio, South Dakota, and Texas. The ASA business model is based on the company's financial services, providing funding to farmers who have difficulty securing bank loans or need additional finances to expand operations. All production supplies ("farm inputs") must then be purchased through ASA. The loans are secured by a first lien on the borrower's crop. ASA products, while not the least expensive on the market, are competitively priced. As a result, some farmers turn to ASA simply for the sake of convenience, opting for a single source of farm inputs, financing, as well as the production expertise ASA makes available to its customers. The company makes a negligible income on financing, generating most of its revenues from farm inputs, which are mostly comprised of seed, chemicals, and fertilizer. ASA offers seed from 30 national and regional seed companies and works with customers to determine the proper hybrid or variety of seed needed. Agricultural chemicals are available through major distributors or suppliers. ASA offers fertilizer from more than 500 suppliers. Company profits from all of these inputs are the result of standard dealer discounts, negotiated pricing, manufacturers' rebates, and opportunistic purchasing. In addition, ASA generates fees by acting as an agent for multi-peril crop insurance. Because it is in the company's interest that farmers succeed and become repeat customers, ASA works closely with its borrowers, paying visits to farms to offer suggestions on harvest plans and marketing strategies. Aside from making seasonal loans to farmers, ASA, through its AgriFlex Credit program, also offers long-term financing. ASA also operates Powerfarm.com, a robust web site that serves farmers in a variety of ways. They can not only apply for financing, but also buy supplies and lease equipment on line. In addition, they can stay informed on agricultural news, weather forecasts, and market quotes, and take advantage of sophisticated web-based crop production tools.