AI can Empower Agriculture Retailers, Farm Supply Cooperatives

New artificial intelligence technology is enabling agricultural retailers and farm supply cooperatives to optimize their operational performance while strengthening all-important customer relationships. In addition to broad-based AI platforms that can be leveraged to simplify everyday business operations, farm suppliers now have access to AI apps specifically designed to support field agronomy and crop production.

According to a new research brief from CoBank’s Knowledge Exchange, AI technology offers ag retailers a new set of tools to optimize workflows, inventory management, employee performance and other key business functions. Farm supply businesses that rise to the challenge of adopting AI can also enhance their position as trusted advisors and essential partners in the ag supply chain.

“AI in agriculture can be utilized in a company’s back office, front office, as well as within agronomy and supply chain operations divisions,” said Jacqui Fatka, farm supply and biofuels economist with CoBank. “Early adoption and reliable partnerships will provide an advantage for those willing to test the AI landscape. Ag retailers should research companies and pick AI partners who understand agriculture and promise value beyond just lofty ROIs.”

Agricultural cooperatives and retailers serve as a critical relationship bridge between farmers and input providers. The potential erosion of those relationships due to alternative distribution models, disruptive technologies or other competing forces is one of the biggest challenges for ag retailers moving forward. Early adoption of AI can help the ag retailer sector stay ahead of competitors while maintaining and strengthening customer relationships.

Fatka suggested ag retailers start with easy-to-implement, low-stakes AI applications for things like email and presentation assistance and customer interaction summaries before tackling more complex tasks. “Testing out different pathways to gain internal acceptance can lead to greater long-term success. For instance, an easy initial test might be recording virtual meetings with CoPilot. Within minutes, it can deliver an AI-generated summary of the meeting with key takeaways, immediate action items and future tasks.”

Ag retailers can also start leveraging AI to optimize workflows for standard business functions like human resources, accounting, operations and sales. Using AI to evaluate and streamline these functions offers a high return on investment relative to the efforts required to build or implement such tools. Fatka stresses, however, that companies should establish guardrails for the use of customer information and understand privacy changes with the use of AI tools.

While AI is unlikely to eliminate ag retail jobs, it can help simplify tasks and reduce human error or bias. In addition, as labor continues to be a challenge for many rural enterprises, it can provide continuity during labor turnover. AI can also help agronomists and other staff cover more acres or customers. Apps like AgPilot enable agronomists to interact with AI verbally while traveling between customers, allowing them to input crop protection recommendations and smoothly advance potential sales from one stage to another.

“The stakes are high for agribusinesses operating in an environment where margins are tight,” said Fatka. “However, ag retailers will need to ensure AI costs do not outweigh the benefits. The cost of experimentation is minimal and delaying a trial adoption of these promising tools could result in missed opportunities for growth.”

EDITOR’S TAKE:

The use of AI to improve efficiency and productivity will be crucial to ag retailers and cooperatives. It will also potentially lower barriers to entry and increase competition. In that regard, the article is correct to point out that early adoption will improve the possibility of surviving this latest technology disruption. The fact that AI can reduce errors and help retailers cover more acres is a critical consideration. AI is not the answer to all issues, but it can help improve profitability and even relationships when managed properly.

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