Farm supply cooperatives and distributors are positioned to benefit from an active and profitable spring agronomy season, according to a new report from CoBank.
The report says the profitable spring is driven by high commodity prices, strong input demand and an expected increase in planted acres of soybean, corn and wheat.
Ag retailers begin the 2021 planting season with favorable industry fundamentals and an opportunity to expand profit margins, according to the report.
A CoBank researcher says, “Improving profits for cooperative agronomy departments should help cushion the negative carry caused by an inversion in futures prices.”
Given the higher acreage forecasts, farmers are expected to purchase more fertilization products during the spring planting season.
Rising fertilizer prices are also a positive indicator for new sales and retailer margins.
Inventory levels of seed, fertilizer and crop protection products are largely expected to be sufficient for the projected increase in spring-planted acres.
However, pandemic logistics challenges may impact deliveries.