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Alberta Yield: Torchlight Innovations bringing grain trades into the 21st Century

Innovation is often summed up by the cliché: Building a better mousetrap.

For Mitch and Shane Dawson, both in the Alberta cattle industry, they saw a system still done on paper that they could automate.

Large cattle feeders bring in thousands of metric tons of grain. Bought in a grain brokerage, the grain is then shipped out to the feedlots, unloaded, and then, well… eaten.

Mitch Dawson, co-founder of Coaldale-based Torchlight Innovations, said he was originally brought into his current job to clean up the grain contracts.

Dawson said for the producers, there are transparency issues. It’s an input cost for their business, and traditionally if the grain is showing up and they can feed the animals, they’re in good shape.

In the meantime, the grain sellers are trading the grain and making money.

“There’s a bit of a disconnect there as to how this should be managed,” he said.

The information was available. The producer knows how much grain was purchased. On the sell side, information on the load, the weight and delivery was available.

“They (producers) typically have to track that down over a matter of days, or weeks, or months or sometimes not at all,” Dawson said.

“If they’re able to get that unequivocally from a digital location, we’re very confident we’re going to be able to shrink their cash cycles, exponentially.”

A lot of this information is compartmentalized in two, three, four different systems. The Dawson brothers designed a one-stop electronic portal to improve the ease of access for producers.

Trading the same, the tracking is different

Dawson said the trade is done the same as it always has – over the phone.

“Agriculture is all about that reputation and relationship management, right, so we don’t want to change that,” he said.

Once the deal is agreed upon, the seller inputs the trade into a producer’s account.

When shipping begins, the grain can be traced back to a particular sale to make sure that contract has been filled at a certain price. Each load comes with a load number that’s connected to the sell contract.

“This is really pertinent, because a lot of the time you have multiple contracts open with the same person, the same brokerage,” Dawson said.

“You know which load is applied to which contract, and your invoice amount when you receive is going to be the same as what you put in your inventory.”

He said right now that load is being applied to the oldest contract. The contracts and delivery lacked continuity and transparency.

It reduces slippage, overpayment and general inventory tracking for producers, Dawson said.

Know the cattle, but not the tech

Dawson said the biggest benefit from working in the Alberta Yield program was they were able to start making connections on the tech side of things.

They had the ag and business backgrounds, but the tech side of this was a new frontier.

“We were kind of just making it up as we went, because we’ve never done it before,” Dawson said.

From learning the jargon to networking with tech talent, they were able to start building that so-called data room to continue moving the business ahead.

Right now, they’re building partnerships on the sell side. They’re ramping up licensing to a network of users across Alberta.

They have their eyes on an artificial intelligence component that tracks purchase price per animal. It could monitor usage estimation to trigger grain buys for the producer.

It’s about helping the producers clean up something they’ve been doing for decades so they can be more efficient and improve that agriculture bottom line.