Online Sellers Dictating the Future for Traditional Ag Retailers

(GREENWOOD VILLAGE, CO) Will virtual suppliers defeat traditional ag retailers? It’s a question that retailers, farmers, and suppliers are all asking. Will Secor is an economist with CoBank and believes that online competition will continue to grow and pressure margins for traditional ag retailers in the years ahead, therefore many traditional retailers will need to adapt to both survive and thrive in the new marketplace. In 2017, USDA figures show that only 25 percent of crop farmers purchased inputs online. However as farmers get larger, through increased consolidation, they are more likely to purchase inputs online. Thirty-nine percent of farms with more than $250,000 in sales purchased inputs online compared to 24 percent of farms with sales of less than $100,000. So as farms increase in size, more farmers are likely to purchase inputs online. Secor explains that traditional ag retailers transforming into the ag retailers of tomorrow will face the headwinds of the changing landscape. E-commerce will grow and continue to drive the changes for the retailers, forcing many traditional players to either adapt or close. The ag retailers that successfully embrace the challenges introduced by e-commerce will succeed as tomorrow’s cutting-edge ag retailers.