Kellee James' Company Mercaris Helps Markets Encourage Sustainable Innovation

Photograph courtesy of Kellee James

This week, we're excited to highlight the work of Kellee James, Founder and CEO of Mercaris, a market data service and trading platform for organic, non-GMO and other identity-preserved agricultural commodities.

Prior to Mercaris, Kellee spent five years at the Chicago Climate Exchange (CCX), the first electronic trading platform and registry for spot, futures and options contracts on carbon, sulfur, clean energy and other environmental products. In 2009, she was appointed by President Barack Obama as a White House Fellow where she advised members of the administration on environmental markets. She has also worked with coffee farmers and commodity banks in Latin America on risk management and income diversification strategies. Kellee is currently a non-resident senior fellow at the Joint Center for Political and Economic Studies, a think tank in Washington, DC.

What drew you to the world of organic and non-GMO agricultural trade?

Organic agriculture is probably the only widely accepted, somewhat standardized method of agricultural production that takes into account many environmental 'externalities' - that is, the total costs and benefits of things like soil health, antibiotic use, water quality, etc. that are not accounted for under other food and fiber systems.

No one system has all of the answers, but producing food organically offers some important tools.

What do you view as the biggest challenges to facilitating a more sustainable food system?

There's no shortage of big challenges! We have to feed a growing global population, without ruining our water supply, depleting soils and pumping harmful chemicals into our atmosphere. We have to do this with the drastic effects of climate change starting to show up, and, we have to make sure agriculture provides a sustainable source of income for those involved in production while being affordable for all types of consumers. 

"...the chance to create something new and meaningful, something that solves a real need, is irresistible. The only way to know for sure is to test out your idea."

Mercaris is building a future where organic and non-GMO crops are traded the same way as conventional crops. How would this impact the development of sustainable food systems?

Actually, we're trying to build a system where organic or non-GMO crops are traded more efficiently than the conventional sector. All types of agricultural market participants still buy and sell over the phone. It's inefficient, time-intensive and imposes transaction costs that negatively impact everyone from grower to consumer. What we're trying to build at Mercaris is a way for the organic supply chain to move a lot of that activity on-line. If the conventional sector eventually follows suit, they will probably realize some efficiencies as well.  

Does improved market data have different impacts across varying scales of industry?

I think it does! I think good information will benefit the small and mid-size businesses (whether they are farmers or food companies) first and foremost. Often, these are organizations without the in-house research to uncover or understand market data. So, they may unknowingly not be getting prices for their products that reflect the broader market. But we've found that even larger organizations need and can use this information.

As Mercaris has worked to aggregate data, have you come across any surprises?

Getting good, accurate, consistent data is tough! There are no real shortcuts - it means collecting information from a variety of sources, having a transparent methodology for turning that raw data into reports and getting constant feedback from our stakeholders on ways to keep improving that data.

What are some ways in which you envision Mercaris's services expanding and evolving?

Until very recently, Mercaris provided information for organic grains & oilseeds. That included price & volume information for US & Canadian grown grains, as well as analysis on certified processing facilities, acreage information: anything that affected supply or demand.

We'll continue to expand the number and type of crops that we cover. Now, we're adding coverage of an important segment, organic dairy markets. Its our first foray into animal proteins, and launched with our publication of a white paper, analyzing organic fluid milk, cream, milk powder and other dairy products. Right now, organic dairy cows represent nearly half of the demand for organic feed, so it's an important segment to understand.

How might Mercaris's services inform choices made within smaller-scale local food economies?

We have begun collecting all sorts of stories and use cases. From the small farmer who is researching whether organic production can be profitable and doing the analysis to make a decision about whether or not to switch, to the established organic grower who is trying to decide what to contract his or her crop for this year. We've also seen entrepreneurs who are trying to establish or grow an organic line of food products and are trying to understand costs. We have stakeholders that range from small dairy farms, to food processors that tap into our market data and on-line marketplace. If they work with organic commodities and ingredients (particularly grains), we can help!

You saw a gap and created a service to fill it. Do you have any advice for others building similar endeavors?

Good research (including a willingness to sit down and talk with all types of people from all types of organizations), combined with the energy and drive to see an effort through to success is key. I don't think there are any easy answers - starting something new is difficult! But the chance to create something new and meaningful, something that solves a real need, is irresistible. The only way to know for sure is to test out your idea.

This post was originally published January 2016.