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The winds of change are blowing stronger today than ever before for agribusinesses. Consolidation is one word that seems to be on the mind of many people. Add to that several simultaneous technological revolutions and you get the sense that nothing is safe from such pervasive change. What about ag retailers?

Ag retailers certainly are not isolated from change. In addition to the obvious changes mentioned above, they will have to contend with an expanding layer of regulatory requirements from the Environmental Protection Agency, Occupational Safety and Health Administration, and Department of Transportation. Similarly, they will continue to experience severe shortages of good employees. Moreover, if all that wasnít enough, retailers - like others in agriculture - are feeling the ever-tightening grip of a slumping ag economy.

Judging from this set of circumstances, you could conclude that the future is bleak for ag retailers. But nothing could be further from the truth. Alert and adaptable retailers will be part of a stronger network or system that will emerge from all of the changes and challenges they are facing today.


Why am I so optimistic? First, the use of technology. Using the Internet wisely will help improve a retailerís profit margins by creating operating efficiencies and lowering costs. For instance, the business-to-business Internet can bring together small, inefficient and fragmented purchasing and sales operations into more viable units. Another cost-saving measure will be improvements to recordkeeping and accounting practices - two areas often overlooked or ignored today. Similarly, by utilizing technology, retailers can reduce the amount of time and effort needed to comply with government regulations and therefore improve their bottom line.

Technology also is an opportunity to expand customer service. The ag retailerís customer, the farmer, like everyone else in society today, is pressed for time. Using technology to create ways to save customers time and money will add value and put the retailer in a much more favorable position. The ag retailer actually can use technology to help educate customers about products and services they may have taken for granted in the past, thereby building customer loyalty.

Another reason for my optimism is that ag retailers of the future also will offer many more "risk management tools" than they presently do. These could come in the form of marketing expertise, credit and finance, insurance programs, etc. - all custom-designed to meet customer needs. Retailers might even offer databases and sophisticated formulas for making complex management decisions. Such changes will create additional value and actually bring retailers closer to their customers.

Two more reasons I am so optimistic are people and tradition. In the midst of constant change, people naturally look for familiar signposts. The ag retailer is one of those signposts in many rural communities. Retailers offer peace of mind through their customer service and quality control programs. If something goes wrong, they are there to help. If customers need to adjust their plans rapidly, most likely they will turn to their local ag retailer for help. Future success, therefore, rests on finding and keeping good employees. This may be the ag retailerís greatest challenge in the future.


The winds of change bring with them ever shifting sand. Today, everyone involved in agriculture must manage change. Ag retailers are no different. Many of the challenges in the future will be the result of higher and higher expectations on the part of consumers. Consumer concern about what is in the food they eat, the water they drink and the air they breathe will intensify in the future. The issue of biotechnology is simply the tip of the iceberg.

Consumersí quest for knowledge about their food and environment will demand that agriculture in general have a much-improved "track and trace" system. Ag retailers of the future will be an integral part of such a system. This will require new and improved relationships with partners up and down the food chain.

Thus, ag retailers will be even more vital to the agriculture of the future. They will forge stronger bonds with consumers, their farmer-customers and suppliers. They will use sophisticated technologies in sophisticated ways and add value by offering more risk management tools than ever before. However, ag retailers are great people, and thatís one thing that wonít change. AM

Paul E. Kindinger is president and chief executive officer of the Agricultural Retailers Association.

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