A new report from CoBank shows three threats to the agriculture supply sector for 2019. 

Poor weather last fall and so far this spring have combined with stressed farm financials to pressure ag retailer margins and impact farmer decisions that could reduce sales volumes. 

 

Increased costs in the form of operating expenses for ag retailers, including labor, equipment and other expenses, will potentially rise due to a compressed spring planting season. 

The report says that as commodity prices have declined, farmers are increasingly price shopping and looking to cut costs. 

 

Variable costs like fertilizer, seed and crop protection products are key targets. 

Delayed farmer decisions can also be linked to weak farm financials. 

 

The report says stressed farm financials combined with a decrease in prepays, ag retailers are facing greater inventory risk and more difficult inventory decisions. 

Accounts receivable risk for ag retailers will likely increase as cash farm income dropped nearly ten percent in 2018.