A new report from CoBank’s Knowledge Exchange says the ag retailer of the future has an opportunity to earn more income from precision agronomy services and emerging sustainability management programs. Traditional crop input sales will continue to be a boon for retailers in the future. The report says the current strong financial returns that cooperatives and independent ag retailers are enjoying provide a timely opportunity to invest in new technologies. The goal would be to position themselves for success in a rapidly evolving marketplace.
Kenneth Zuckerberg, lead grain and farm supply economist for CoBank says, “The traditional approach for farm supply cooperatives is to save above-average profits when times are good and then manage costs during a downturn. Unfortunately, this approach exposes cooperatives to revenue volatility and declining earnings during down cycles, which can often last five or more years.”
Instead of relying on product commissions and rebates alone, Zuckerberg says farm supply cooperatives’ path forward is to expand their precision agronomy service offerings and capture more income from consultative service and software fees. He says, “Putting technology and information to work to help farmers manage their inputs and production is where farm supply co-ops excel.”
The National Association of Farm Broadcasting and the American Farm Bureau Federation contributed to this report.