The startup world is evolving. The massive investment in the ag industry during 2020 may not be slowing in 2021, but what is occurring is mergers bringing these companies together. For example, Farmers Edge recently announced it purchased online ag retail startup CommoditAg. What does that mean for farmers?

Farm Progress talked with Wade Barnes, CEO and founder of Farmers Edge, to better understand how buying an ag retail system fits with this data-forward company's strategy. Barnes points out that Farmers Edge has already been active in creating new products in the insurance industry using data as a driver. Buying CommoditAg continues that trend.

"I'm an old retail guy," Barnes acknowledges. "I understand the business model pretty well. I think that retail is going to change."

He looks to the continued need for farmers to have logistical support in the field. "I understand that need for logistics out in the field," he says. "People from Silicon Valley don't understand how much work has to get done on a tight timeline, and how much product has to be moved."

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The farmer relies on that infrastructure every season, including that brick-and-mortar support from retailers. "That's never going to go away," Barnes says.

CommoditAg, founded in 2017, offers farmers and ranchers a convenient online marketplace with transparent and unbiased access to the products and technologies they want and need. The company currently has 14 retail distribution partners, with more than 500 locations serving 170,000 customers, who represent a 70-million-acre footprint. Offering a broad portfolio of more than 200 brands and products from more than 50 suppliers, its category selection includes crop protection, seed, fertilizer, micronutrients and biologicals, agricultural lubricants, animal nutrition and more. CommoditAg currently has more than 40 local fulfillment centers covering 13 states, and it plans to expand its footprint to over 75% coverage of the U.S. business by the end of 2021.

Technology and retail

For Barnes, the CommoditAg buy is about creating a kind of ecosystem where farm data can be used in ways to make buying more efficient. "A farmer's phone is attached to his hand," Barnes says. "They're becoming more digitalized, and farmers realize they do everything on their phone the same way."

That changing mindset is an opportunity. For a segment of farmers, Barnes says they will want to use technology to make their purchases. He acknowledges that not all farmers will move this way, "I also think that the things we do and the data we collect sort of drives the farmer to a decision," Barnes observes. "All of a sudden, it's like, we're missing sort of that last lap of them actually going out and buying. And the farmer does want to shop local."

Combining data collected by Farmers Edge into your purchase decision at CommoditAg is the direction Barnes is heading. Knowing your yield and calculating nutrient requirements for the following year’s crop are the first steps. If you could simply move that data forward and lock in your fertilizer or crop protection purchase based on the data, buying could become more precise.

The ag retail industry is looking at that Amazon-using farmer who buys online. Yet the need for that local logistical support is important. The Farmers Edge purchase aims to create an omnichannel retail experience, allowing the farmer to use their data to make more detailed buying decisions. It appears Barnes and Farmers Edge have moved to make a full-circle system, where data from farmer to retailer can be put to use.

CommoditAg will function as a wholly owned subsidiary of Farmers Edge led by the existing CommoditAg leadership team. As the release announcing the purchase explains, the acquisition builds on Farmers Edge investments in establishing strong digital connectivity between farmers and their trusted advisers, while meeting the demand for complete integration, transparency and personalized experience.