Navigating Choppy Ag Retail Waters

Aligned Ag Distributors owners discuss strategies to adapt to tight times

Agriculture’s a challenging industry today, but independent regional ag retailers are taking a range of steps to evolve to stay ahead of the many variables influencing their grower-customers’ productivity and revenue potential.

Often, the most productive evolutionary path for an ag retailer to meet its customers’ changing needs is anything but a straight line. Changing weather patterns, crop protection product and fertilizer supply chain disruptions and labor logjams have almost universally created hurdles for growers and their ag retailers in recent years, but they’re anything but consistent. That’s a big reason Aligned Ag Distributors (AAD) ownership has become part of the management and operation for ag retailers across the country.

“We’re always adapting to help growers be the best stewards possible of the products they apply and the water they have available to them. It’s our job to support our growers in making the changes they need to make to stay ahead of challenges like the weather we’ve experienced in the last two years,” said Colusa County Farm Supply President and AAD owner Terry Talbot. “Aligned Ag is helping us maintain a very competitive stance in the crop protection marketplace in a way that produces value for our customers.”

As an owner of AAD, Talbot is one of a group of 15 similar independent, regional ag retailers who sought alignment in such an organization as a way to grow their presence in the global crop protection marketplace, access exclusive market intelligence and derive value from interaction with similar business owners in a diversity of geography from southern California to the Mid-Atlantic region. For retailers like Talbot, AAD ownership is ultimately helping his growers adjust to changing market conditions better by his ability to pivot when market conditions — whether in or outside of agriculture — call for such action.

“There’s so much happening domestically and globally, like holdups at the port and supply chain backups. These dynamics are on top of inflation and rising costs on everything,” Talbot said. “While everybody’s getting their wings clipped by the current situation, we’re always looking at ways we can purchase and procure products so we can maintain our full lineup of services to our customers. Our bread and butter’s on the full-service agronomy side, and Aligned Ag helps us maintain the competitiveness we need to stay that way.”

Adapting to growers’ production practices

Water availability is a massive issue affecting just about every grower in the Salinas Valley of California where Mike Kennedy serves as president of ag retailer Green Valley Farm Supply. The company specializes in custom-applying crop protection products and fertilizer, jobs that Kennedy said have changed a lot lately as growers make adjustments to production practices in efforts to stretch current meager water supplies. In some cases, those adjustments mean switching to different crops altogether wherever possible. For Kennedy, it’s a call to always be prepared to offer the right specific products his growers need regardless of the crop or production system. That’s meant keeping more different products on hand.

“The changes with irrigation practices to compensate for water cutbacks aren’t as severe here as they are in the Central Valley, but we’ve done a lot to change cultural practices to maintain fertility and productivity,” Kennedy said. “We’re always evolving with our customers to be able to meet the needs of both large and small growers. We’re trying to get them what they need, and we’re doing more to accommodate growers of all shapes and sizes.”

Specifically, this strategy is part of Kennedy’s one-word overall objective moving further into 2022 and beyond.

“Flexibility is huge to our ability to taking care of different size customers. There’s not one shoe that fits all feet, so our ability to be flexible and help growers figure out where and how they can make the most money is huge for us moving forward.”

Planning ahead and planning even further ahead

The pressure exerted by drastically shortened water supplies is causing much sharper pain for Ernie Roncoroni’s grower partners. The president and CEO of Grow West, in Woodland, California, has seen a one-two punch of both record-short water supplies and twisted supply chains for crop protection products and fertilizer ratchet up the pressure on his growers.

That’s meant growers have had to not just create a single plan for each growing season, but several backup plans that account for the extreme drought gripping the Sacramento Valley and the supply logjams for even some of the most common crop inputs. The same is true for the ag retail leader himself; Grow West has taken steps to not just be “on every acre” for its customers, but also position itself to be ready to take care of growers’ sometimes frequently changing agronomic needs.

“We’re trying to hedge and buy as far in advance as we can. A lot of customers took advantage of early pricing and communicated supply situations. It’s not comfortable for anyone anymore,” Roncoroni said. “Now, we need to know plans A, B, C and D. We never used to think about that before, but we’re working with growers to pivot and move to backup plans much more nimbly than ever before.”

Part of that effort for Roncoroni and the Grow West team has been building up chemical storage to carry more inventory given the ongoing likelihood of product supply shortages and changing grower needs as they adjust some cropping plans.

“We’re building another chemical warehouse to carry more. We’re carrying twice as much inventory than a year ago,” he said. “With suppliers planning to raise prices, we don’t want to be on the wrong side of a purchase, and we want to make sure we have everything these growers may need.”

Adapting services and buying strategies

Supply crunches retailers like Roncoroni and Grow West are experiencing aren’t limited to the western part of the U.S. At Frederick, Maryland-based Willard Agri Service, even some of the most common crop protection products like glyphosate and 2-4D have been in short availability for Bob Willard’s grower customers. It’s meant opening up new supply chains when others have been closed off, all based on relationships and driven by a simple mantra: always have what the customer needs.

“We have buying strategies, especially through AAD, but when something is short for everyone and you have to have it, all the planning sort of goes out the window,” Willard said. “We typically lay out everything we need and order as soon as we can, but we’ve increasingly had to go to non-traditional sources to meet basic needs. We’ve been able to get the supplies we need, but it’s been because of our relationships. That’s a major thing about AAD: the relationships and our partners there who are super-smart businesspeople. Networking with them has helped us in securing chemistry for our growers.

Willard’s also watched some of its larger customers add their own sprayers to conduct their own field applications. In an area where no-till and cover crops cover just about every row crop acre, running the sprayer is virtually a full-time job at times during the growing season. While customers purchasing their own sprayers would normally mean the loss of custom application work for Willard, the company has adapted with its Load N GO system that applies the company’s equipment, technology and expertise in mixing and loading crop inputs to growers’ self-applications. It’s enabled Willard to sustain business and continue to meet customers’ field application needs.

“Load N GO saves so much time and trouble in the field, and growers don’t have to mix chemical. It adds safety, simplicity and speed to field applications and takes chemical-handling out of the hands of the applicators,” Willard said. “It’s all already premixed for them to pick up on a semi-trailer, take to the field and load up in just minutes.”

Adapting to changing product logistics

The kind of logistical challenges Load N GO helps the Willard Agri Service team overcome are front-and-center for Roy Young at Land View, Inc. The Rupert, Idaho-based retailer provides full agronomic service to growers in a large geography. As such, logistics — getting product where it needs to in the needed timeframes — is a frequent challenge for Young and his team at Land View. As such, he takes a multi-modal approach to logistics, working with trucking companies, railroads and whatever other shippers and purveyors he can to ensure his customers have the product they need. He sees adjustments he’s made to adapt to the logistical challenges his company and customers face — like changing carriers and adjusting internal product carry — as positioning his company well if and when logistics “loosen up.

“Hopefully we can learn a little bit from the last 18 months and get along better moving forward,” he said. “We’re just focusing on controlling what we can, not worrying about the things we can’t, and being conservative.”

Prudence with technology and labor

That kind of conservative approach is helping Carl Hoff and Butte County Rice Growers Association meet growers’ changing needs while continuing to advance with things like new technology that will yield long-term improvements for both the ag retailer and its customers.

“Our grower base is interested in technology, but I want to wait and see what platforms survive and the value propositions they offer our customers. Resource dollars could be at a premium since we’re heading into a choppy business cycle now, so we’re focusing on strengthening the core businesses we understand well and serving growers that way,” Hoff said. “Technology will be part of that equation. I think that strategy resonates with growers right now. Not spending a lot of money on something that is a potential loss is a value proposition they understand.”

Hoff added he’ll continue to rely on Aligned Ag Distributors, of which he’s an owner, to identify and secure the right products and technology to help his growers thrive in an uncertain time.

“I would say our investment in AAD and being part of it is even more important now in choppy times, because I’ve outsourced some key product procurement functions to professional management that’s going to make sure I have the supplies when I need it,” he said. “They’re experts in handling supply chain issues and putting me at a price point where I can continue to maximize my value proposition even in a choppy environment.”