Labor: it’s what any business needs to run. 

But in the Ag retail world, labor has also increasingly become one of the biggest frustrations. How agribusinesses overcome the industry’s current labor challenges will define how successful they can be.

To help us understand more about the labor landscape in Ag retail, we chatted with Margy Eckelkamp. Margy has been at Farm Journal for 17 years in several roles, most of them centered on machinery, agronomy, and technology. She’s been reporting on Ag retail for the past seven years and now also leads The Scoop and Top Producer Magazine.

In Part 1 of this Smartwyre Insights conversation, we dig into the specifics of the labor challenges facing Ag retail, how technology can help the industry face those hurdles, and what the future of labor looks like in the Ag retail space.

The Scoop recently published a poll that asked Ag retailers their biggest challenge, and well over half of respondents (60%) pointed to labor. Where specifically are they having labor issues? What do you think that means for retailers?

We do an annual salary survey that asks about sales agronomists and machine operators or applicators. In the past five years, the base salaries for those roles have gone up 26% (for the applicators and machine operators), and 28% for (sales agronomists). That helps color in the lines about what’s going on with labor availability. Retailers have had to come to the market and be very competitive to fill those two key roles.

Then also 73% of those applicators and machine operators are getting bonuses and over 90% of the sales agronomists are getting bonuses. Most of those bonuses are based on performance. But it’s definitely something that has affected the retailer’s business because of that big jump just in the last five years.

We’ve kind of gone through this incredible evolution since COVID. COVID changed work for everyone. In rural America and the large towns Ag retailers are typically based in, there’s just less labor. There are fewer farmers, fewer kids growing up on a farm. For ag retailers, that used to be a huge talent source — the folks that didn’t go into the farm and operate their own business. They went and worked for the retailer because they still loved agronomy or they still really liked and were able to run equipment. The whole labor pool is tightening.

If you had to say, what positions are retailers most worried about?

I think it’s the agronomist of the future because the way the retail business model is changing, retailers have to provide more service. They still have to provide stellar products. But the service they provide is really being elevated, and that’s driven by agronomy. So they need super strong agronomic talent.

They also need truck drivers. That was a leading story during the pandemic. Walmart was offering $100,000 for CDL drivers, and when you think about that, compared to what an Ag retailer might have traditionally paid or be able to pay… that’s a big difference.

How do retailers fix the labor issue? How do they leverage technology? Has there been anyone who’s addressed it the right way?

We published a case study as a cover story last year highlighting the folks at Ceres Solutions out of Indiana. As they shared, their technology use is the new measuring stick. It’s going to be how their farmer customers judge them. It’s also going to be how they attract and retain top talent. They’re really driving toward that 100% digital customer experience and the 100% Ag retail business experience digitally. And what that enables them to do on the customer side is it makes them easier to do business with. It’s giving the customer a value-added experience.

It’s also providing them with higher quality of services — either more consistency, faster timing, or all of the above for their business. It allows them to decrease resources, increase cost savings and automate processes.

So, pretty non-surprisingly, one of the Ceres Solutions locations was named our Business Innovation Award winner last year. This was a single Ag retail location that had transformed their business through digital integration. The top thing that team told me was that making their business go digital slashed overtime. So when you think about that winter season — manual paperwork and teams having to literally push papers through the system and chase paper rolls — they didn’t have to do that anymore. The benefit directly to those teams is it elevated their work. They felt better about the work they were doing because they weren’t doing that manual, frustrating, super time-consuming, after-hours work.

I think when we talk about labor and the opportunities around technology, some folks start running toward automated equipment. I think that’s part of the story for sure. But I think the opportunity here and now for ag retailers is to look at redundancy. Look at inefficiencies. Maybe ask some hard questions and get their teams aligned so they can work together to start elevating everybody’s work.

Can you go into that in a bit more detail?

They (Ceres Solutions) talked about everything from product ordering to application tracking to invoicing. And those are kind of the three fundamental things that a retailer delivers when it comes to products for the farmer. But that process has been cluttered along the way as your product offering is diversified across multiple manufacturers.

You’ve also had a significant amount of consolidation in this industry. You had businesses  coming together that were using very different systems. So you’ve had to have a reckoning there on how does everybody streamline how they conduct their day-to-day business and what should that look like? And what could that look like rather than what does it look like?

Have you seen anyone else doing things that are a little bit unique in addressing the labor issue?

Part of what I think will help address labor shortages will be machinery automation. We’ve seen everything from self-propelled sprayers that are outfitted to follow along with another machine. There’s also standalone equipment that doesn’t even have a cab that will only ever be automated by itself. There’s also even, from the machine learning and artificial intelligence side, the selective spray application equipment. Those sprayers are rolling for the first time this summer.

I don’t think we exactly know everything that’s coming today, because it’s being developed so fast. But what I do know is the folks that are willing to try and the folks that are willing to give their feedback to those beta test plot pilots — they’re the ones writing the future of autonomy. It’s their use cases being baked into how those machines are set up, how they’re being programmed, and how the machinery companies see where these could fit into agriculture.

In terms of labor and technology, what are you seeing around the new generation taking over from the older generation?

I think folks still talk about millennials like, ‘Oh, no, here come the millennials.’ Well, the millennials have been in the workforce for 20 years. If folks are still worried about millennials, I think they need to hit the pause button and take a deep breath because they’ve been working with millennials for two decades. It’s really the new generation coming up, Gen Z — and they are very receptive to technology.

Folks often talk about, will technology be a way to keep people on the farm? Will technology be a way to engage maybe a nontraditional ag audience in our industry? Generationally, I think yes, we are going to be entering this wave of more technology to help us do our jobs better at an elevated level and also just keep people engaged.

In Part 2 of our conversation with Margy, we’ll dive deeper into some of that technology, how retailers can use new tech to face future challenges, methods for organizing all of the digital tools they use, and how the Ag retail space can fix existing data silos.