In 2018, Proagrica surveyed the US ag retailer community, reaching out to over 5,000 businesses in the sector, to better understand key issues affecting profitability, growth, and the extent to which data and analytics are implemented into their current systems.
Of all the “pain points” rated by respondents to Proagrica’s survey, low farm commodity price was rated most frequently as the biggest perceived issue affecting Ag retailers today. A staggering 65% of respondents identified themselves as under financial pressure, with 26% naming falling commodity prices as the biggest challenge facing their business in the next 12 months.
Rising input costs have combined with low farm commodity prices to put increasing pressure on retailers of all sizes. Growers are looking to reduce costs first and foremost, with brand loyalty and retailer location ranking as secondary factors in their purchasing decisions.
When naming specific disruptors that have led to this marketplace shift, consolidation has been named time and time again as a point of stress. Consolidation has resulted in larger firms which are able to undercut the offering of smaller retailers with lower prices. The US in particular has seen an increase in consolidation across the supply chain including primary food production which has continued to shift to larger farms. By 2015, 51 percent of the value of U.S. farm production came from farms with at least $1 million in sales, compared to 31 percent in 1991 (adjusted for price changes). 
Many respondents also named the rise of “tin-shed” businesses and generics as points of stress – businesses willing to endure the margin cut in a way that established Ag retailers cannot. Sellers that can supply the market with low-cost product have put a significant dent in the cashflow for many Ag retailers.
Ag retailers have been astute in identifying these potential pain points for their business and are aware of the need to adapt. Enhanced productivity and efficiency are acknowledged as the leading areas for potential improvement in their businesses. 68% of respondents note that substantial value would be granted by enhanced management of sales and productivity, followed closely by increased visibility of crop pest threats and mitigations. Insight gained from customer analysis, including visibility of market share, is also a factor for retailers looking to best position themselves in the marketplace.
The pressures are acute, but ag retailers are innovating and driving the development of data solutions to best meet the needs of their customer base. The need to remain competitive in the face of these rising challenges has underlined the importance of change. By adapting workflow practices that prioritise connectivity between disparate systems, businesses are able to drive profits and remain competitive despite the pressures faced in a turbulent market.
 Three Decades of Consolidation in U.S. Agriculture James M. MacDonald, Robert A. Hoppe, and Doris Newton – USDA