As I write this column, our group has just returned from our annual gathering of industry experts. Known as the PACE Council, this meeting brings together the heads of major ag retailers, market suppliers, equipment makers, and other agricultural analysts to discuss the most important trends impacting the marketplace in a one-day roundtable format. As you might expect, this year’s meeting looked at myriad topics including precision agriculture, dicamba troubles, and consolidation at all levels of the agriculture industry. There was also a report on the preliminary findings from the 34th annual CropLife 100 survey of the nation’s top ag retailers.
And then there were the three letters that continually cropped up no matter what the topic of conversation happened to be – FBN (Farmers Business Network). To say that all things related to FBN and its business practices dominated much of the day-long event would be a gross understatement. Several members of the PACE Council described how FBN had negatively affected their businesses during 2017 by cutting into their already slim margins on various products.
Still, at least one attendee pointed out that ag retailers he had spoken with were all dismissive of FBN and its ability to remain a viable business for grower-customers in the long run. “Most of the folks I’ve heard from seem to think FBN is another Rooster and won’t last very much longer,” said the PACE Council member, referring to the dot.com company that went bust after a few years back in the early 2000s. “But I think it would be crazy, stupid to ignore them. Even if they end up going away, the business model they’ve introduced to agriculture will probably be tried by someone else.”
For proof of this fact, statistics were presented at the meeting showing that online agricultural product sales in 2017 increased from 16% in 2016 to approximately 33%. And although this percentage included products as office supplies and equipment replacement parts, mainstream crop inputs such as crop protection products, seed, and fertilizer were represented.
Going into 2018, virtually everyone at the PACE Council meeting agreed that the market challenges presented by FBN and similar Internet product providers will be something all ag retailers will need to keep a very close eye on.