E-Commerce Disruption Pushes Ag Retailers | CoBank Knowledge Exchange Brief

The growth of e-commerce has transformed consumer
retail, and it is now poised to accelerate changes in agricultural retail. According to the USDA, around a quarter of
farmers bought inputs online in 2017, that’s about five percentage points higher than 2015. This trend will likely continue as farms grow
larger and internet access continues to increase. E-commerce startups in ag retail have eroded
farm supply margins by bringing new competition to the industry and by increasing price transparency. While these startups will accelerate the decline
of traditional ag retailing, it will not be the demise of traditional ag retailers who
adapt. Ag retailers who focus on two key functions
of retailing – distribution and service provision – that leverage their physical
assets and relationships with farmers will likely be well positioned to compete with
these new-comers and thrive in the years to come

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