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CoBank report: Farm supply co-ops should rethink business models

Farm supply cooperatives are a major provider of agricultural inputs but competition from other growing regions and low commodity prices in recent years have challenged their business models.

A new report by CoBank outlines ways that co-ops can create additional value and look at other options beyond consolidation.

CoBank Lead Economist Ken Zuckerberg says…“we’ve seen a lot of consolidation in the co-op space, but our feeling is that consolidation does not solve underlying fundamental issues.”

He tells Brownfield co-ops should consider partnering with an aerial imagery or robotics company.

“Consider partnering with another ag tech service provider that would allow you to provide more precise information to your co-op members given changing weather patterns, soil composition, incidents of weeds and pests, and just generally taking a more modern and technologically driven approach to precision agriculture.”

Zuckerberg says other ideas include aligning with a strategic partner like a local or regional competitor and improving general operational excellence and efficiency.