The world needs agricultural efficiency more than ever before. According to the2018 Global Agricultural Productivity (GAP) Index, put together by the Global Harvest Initiative, food production is not growing fast enough to sustainably feed the world in 2050. The report shows that if this trend doesn’t change, the world may not be able to provide the necessary food, livestock feed, fiber and biofuels to sustain our growing global population.
For as long as there are people, there’s a demand for food, which is why the agriculture business continues to thrive year over year. Entering the business of ranching or farming is a lifestyle not fit for every entrepreneur. It can present some significant challenges, including livestock and land management, intensive year-round labor, and so forth. But, the agricultural supply business is vital to ensuring food production prospers, so it can be an exciting and lucrative option for the right person.
Agricultural Supply Industry Overview
According to IBIS World, sales from pet food, livestock feed and related supplies represented the largest product segment in 2016, accounting for a 28.2% share of industry revenue.With about 6,713 registered farm supply stores responsible for employing about 75,587 in the US alone, the agricultural supply industry brings in about $16 billion in annual revenue. IBIS World projects this segment’s share of the industry will rise through 2021. So, if entrepreneurs do their due diligence to target the right markets with the right inventory to help farmers meet increasing production demands, an agricultural supply business can prove successful.
Agriculture Inventory to Service Your Specific Market
To maximize your sales, be sure to profile your market and identify their needs. Then, source your inventory accordingly. Work with your local Chamber of Commerce and conduct online research to find demographic information for your region. Get in touch with the Department of Agriculture information about the number and nature of regional farming operations. Ask for data that will help you serve your farm supply customers’ needs, including specialty crops and livestock, pest management programs and emerging markets that require new types of farm supplies.
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Determine where your competition is and what they sell to find inventory gaps your business can fill and become a trusted one-stop-shop for your customers. Order inventory at wholesale prices to maximize your revenue while remaining competitive.
Leverage Agriculture Technology
From soil health to food spoilage and labor shortages, America’s farmers continue to face the same problems that have burdened farmers for centuries. But, they also need to face new challenges presented by contemporary agriculture, including access to updated and accurate data on seed pricing, yield information, and even commodity forecasting.
If you’re considering entering the agriculture supply business, think about how you can leverage the latest technology to offer services, softwares, and high-tech supplies to farmers and ranchers to improve their efficiency and productivity. In 2017 alone,ag-tech funding through investment or acquisition increased 32% to $2.6 billion, and half of the top 20 deals in the space exceeded $50 million.
If you’re local, consider partnering with ag-tech companies that are related to your market to deliver value beyond simply selling the necessary supplies and equipment. For example, if your business is coastal and services fisheries, consider partnering with Aquabyte, a computer vision hardware and AI software in fish farms to monitor food consumption, thereby minimizing waste and saving money. Or, if you’re focused on inland farmers, look into partners like California Safe Soil, who convert supermarkets’ wasted food into low-cost liquid fertilizers to help combat declining arable land worldwide.
Strike up conversations with rising agriculture-technology businesses to determine if you can develop a profitable partnership between their services and your farmers, fishers, or ranchers. Do research on ag-tech companies that can help bolster your business and improve your profit margins. Leveraging the latest tech is inevitable to meet the agriculture demands of tomorrow, and capitalizing on what these innovative companies already have in the works is a great way to bring your business into the new age of agriculture.
Additional Agriculture Inventory
Consider offering additional supplies that complement your standard, market-tailored inventory offerings. Think about pet food and supplies, which can be beneficial for both residents and farmers alike. Add gardening tools, supplies and seeds to attract local customers. Consider adding non-perishable inventory to your additional offerings to mitigate loss and maximize profits.
As long as there’s a demand for food, there’s a demand for agricultural production and thus, agricultural suppliers. From farm equipment and feeders to property storage, fencing, and the latest technologies to help farmers and fisheries be more efficient, running your agricultural supply business right can be more than just your livelihood – it can help feed the world.