What Ag Retailers Are Saying in 2024? ‘Howdy, Partner!’
January 24, 2024 Over the past few weeks, one of the major stories taking place in the ag retail world involved the formal merger of two giant Indiana-based cooperatives – Co-Alliance and Ceres Solutions. The newly named Keystone Cooperative will become one of the largest ag retailers in the country, with locations throughout the Midwest and annual sales in excess of $1 billion.
And make no mistake – consolidation among ag retailers is expected to be one of the key market drivers in 2024. In fact, according to data from our 2023 CropLife 100 survey of the nation’s top ag retailers, consolidation ranked No. 4 among chief concerns going into the upcoming growing season, cited by 10% of respondents.
However, while the formation of Keystone Cooperative dominated much of the news in January, it overshadowed another important trend now occurring in the marketplace – partnering. Indeed, on January 12, two of the nation’s largest cooperatives – GROWMARK and CHS – announced that they were conducting an exploratory process over the next few months to identify market opportunities for the two companies, to further collaborate to serve owners, customers, and the entire cooperative system.
In truth, GROWMARK and CHS have been collaborating since 2021, when the companies formed Cooperative Ventures. However, this new endeavor will strengthen that effort, says GROWMARK CEO Mark Orr. “Continuing our long history of adding value to our members and customers, while ensuring a strong and vibrant cooperative system for the future, is critical to the GROWMARK System,” he said. “Our partnership with CHS in Cooperative Ventures is a great example of cooperation amongst cooperatives that benefits the shareholders of both companies.”
Loading ...And for long-time readers of CropLife, this move shouldn’t come as a surprise. Last year, as part of our magazine’s celebration of the 40th anniversary of the CropLife 100, we spoke with several ag retailers about key industry trends. One of them was partnering instead of merging.
“This is a big difference from the way we did business 40 years ago,” said Heather Thompson, Director of Innovation and GROWMARK’s liaison to Cooperative Ventures, in an interview with CropLife in early 2023. “By investing in and partnering with some of the most promising start-ups in the ag tech space, we get the opportunity to be on the cutting edge of R&D while still maintaining our focus on wholesale and retail operations with excellence.”
As 2024 progresses, it will interesting to watch which path ag retailers looking to innovate take – mergers or partnering.
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