18 Oct Navigating the Complexities of Crop Protection
October 18, 2021
Do what you do best with Aligned Ag
In today’s crop protection product marketplace, a bump in the road can do more than just slow you down. It can erode your bottom line and lose customers. But there’s a new solution that helps you navigate supply logjams, manage the marketplace’s complexity, continue to retain and grow your customer base and ultimately do what you do best: Provide industry-leading service to the growers you serve.
The recent rise of external factors that disrupt supply chains for crop inputs like common herbicides, pesticides and fertilizer products has complicated life in the ag retail sector. Managing cost-effective product inventory and continuing to meet growers’ evolving needs was already tough enough without such logistical bottlenecks.
There are no easy answers when global forces like overseas supply disruptions and labor shortages stack the deck against the delivery of an integral crop protection product to you or your customers. But now you can put yourself in a position to keep those supplies coming even in the face of tight inventory or logistical hurdles.
Why and how the need for AAD has grown
A gradual adoption of a “just-in-time” mindset in ag retail in recent years has contributed to the need for what Aligned Ag Distributors (AAD) provides its owners. For years, retailers and distributors have sought to minimize the inventory of many products on hand as a way to keep down operating costs.
But global issues like COVID-19-related supply chain disruptions and limited product inventory in places like China have snarled the availability of products like herbicide and fertilizer, contributing to lost revenue for both ag retailers and their grower customers.
“The overarching issue is retailers and distributors have relied on ‘just-in-time’ inventory. Nobody wants inventory on the books. But because of supply chain issues driven by things like the COVID-19 pandemic and product tightness coming out of China, the industry has gotten badly burned by just-in-time,” said AAD President and CEO Mary Tolke. “We’re backing up and looking at proactively meeting our owners’ needs by working with suppliers to be in the best possible position with product volume.”
The market intelligence AAD provides its owners helps them better plan ahead to ensure they’ve got adequate crop protection product supplies so when their customers call, they have what they need.
“Supplies are super-tight, so we’ve started bringing in inventory way earlier. We’re just better able to plan ahead with the information Aligned Ag provides us,” said Terry Talbot, AAD owner and president of Colusa County Farm Supply in Williams, California. “That intel from AAD helps us make supply decisions, whether that’s to wait a bit or get inventory in six months or far in advance so it’s in place and ready.”
Aligning key supply chains
That effort is all about alignment. And it’s part of the name at AAD. The network of independent ag retailers draws on shared motivation of cooperatives, custom applicators, and other agribusinesses around the country to create an industry-wide infrastructure aimed at a single goal. Aligned Ag Distributors takes care of the increasingly arduous task of securing the right supplies of crop protection products — and at competitive prices. It removes much of the complexity of maintaining a cost-effective supply of crop inputs for customers, enabling owners to focus their energy on what they do best.
“We take this job in-house for our retailers,” Tolke said. “It allows them to do what they’re really good at: Taking care of their farmer-customers.”
For Clay Houchin, CEO of Buttonwillow Warehouse Company in Bakersfield, California, that means growing the advantages his company already has over companies whose farm-level presence amounts to a business card and a phone number.
“Working with Aligned Ag allows me and my team to make sure we’re talking with growers on their farms and helping them be their best, whether that’s on the technical side or simply being strong business partners,” Houchin said. “We strive to be nimble and responsive for our customers. And Aligned Ag has really helped us be better at that and focus on what our team does best.”
Concentrated success through combined resources
That means concentrated success through buying power and navigating the massively complex crop protection product marketplace. Aligned Ag Distributors owners have access to exclusive distribution agreements for crop protection products that often mean better pricing and more secure supply chains. That often translates to combined negotiating and buying power based on variables like product volume that would otherwise be out of their reach.
“It’s performance- and volume-driven. We can go to suppliers and demonstrate the skills our owners have in getting their products to the farm gate. That gives us an effective and cost-efficient way to manage product logistics,” Tolke said. “We buy direct so we have no warehousing. And we work with suppliers to buy in quantities that distributors need to be cost-efficient themselves. We commit to our suppliers as early as possible when we inform them of the quantities of a product we’ll need in a specific timeframe. That allows them to manage supply better and allows us to negotiate the best price for our owners.”
But price is just part of the equation for AAD owners; for Woodland, California-based Grow West President and CEO Ernie Roncoroni, it’s more about how that pricing influences the value of the service his team provides farmers.
“Price is absolutely a factor, but our customers aren’t looking for the cheapest solutions,” Roncoroni said. “They’re trying to grow and market the best-quality crops they can, so value is most important to them. That’s why AAD helps us so much; being an owner helps us provide more value to our farmers.”
Most importantly, the AAD effort ensures that when an owner’s customers need a product, their ag retailer’s got adequate supply on hand.
“We forecast needs with our owners and key suppliers, then determine ways we can be more efficient for both our owners and their customers,” Tolke said. “Sometimes that means longer-term agreements with key suppliers driven by supply and demand. We take the time to look at crop protection supply chains, then proactively find ways to better keep products in the right volume in position for our owners. When growers need a product, we work hard to ensure our owners can provide it to them, sometimes when other ag retailers can’t.”
How AAD supports its owners
For AAD owners in California, for example, that means maintaining year-round product availability through supplier partnerships. In other areas where farmers’ crop protection needs are more seasonal like the Midwest, Southeast and Delmarva Peninsula, it’s more about maintaining that availability at key times in the growing season to meet anticipated customer needs for up to four months. And in instances when branded products are in short supply, AAD owners can access generic alternatives to continue to meet customer needs.
“We are always forecasting and communicating with owners about their needs, cost structures and ways we can become more efficient in meeting those needs,” Tolke said, adding sometimes multi-year agreements are put in place to sustain supplies for some products. “We’re always having those types of conversations with key suppliers and owners.”
Moving forward, AAD will continue to monitor its owners’ key crop input product markets and work on their behalf to sustain supplies when and where they need them. Transparency is fundamental to AAD’s work, Tolke said, and will continue to drive the work she and her team do for AAD owners.
“We will continue to forecast and bring products in so that our owners have what they need so they can focus on achieving the performance goals that matter most to their businesses,” she added.
And for Roncoroni, that means staying competitive and sustaining his value promise to customers in an increasingly challenging marketplace.
“This marketplace has changed so quickly. And it’s going to get more challenging in the future. I’m happy with our partnership with Aligned Ag and the other owners,” he said. “Aligned Ag will keep us in the right position to make sure we stay independently owned and competitive in the marketplace so we can continue working to keep our rural communities vibrant and provide top value for our farmers.”
See more on how AAD creates concentrated success for owners or reach out to get involved today.