By Chris Jensen
The farm and ranch segment is growing and changing at a rapid pace. Demographics are driving some of the change, but so is technology.
As America’s farmers age, the next generation of farmers is more apt to be college-educated (69% according to the USDA) and definitely more comfortable using technology while shopping for essential products and to increase efficiency on their farms.
Farm and ranch retailing is no longer confined to rural areas but has expanded into many suburban areas. Hobby farming was exploding in popularity before the pandemic hit, and now everyone wants to raise chickens and grow their own food. Hobby or lifestyle farmers are generally novices, so retailers must spend more time educating them on how to house, feed and take care of their animals.
The nation’s largest farm and ranch retailer, Tractor Supply Company, did $8.3 billion in sales last year, which is more than double the $3.6 billion the company reported in 2010. While Tractor Supply is the only national farm and ranch retailer, plenty of strong regional chains dot the country.
More hardware stores, home centers and lumberyards are diversifying into farm and ranch categories such as feed, fencing, pet and animal health. They are using special events and social media marketing to connect with hobby farmers and others who want to take control of the food they eat.
In an effort to grow its farm and ranch division, Stevensville Hardware in Stevensville, Mont., has expanded its market share by partnering with a local Amish community to produce fence posts at a lower cost—without sacrificing quality or craftsmanship. They have also found success with stocking baby chicks, turkeys and all sorts of exotic fowl chicks, and carry enough feed and tack for every animal on the ranch.
Protecting Food Supplies
While the COVID-19 pandemic threatens food supply chains across the world, there has never been a more important time for local, independent businesses to support farms and ranches. Across the United States, stores like Dahlgren’s Building Supply in St. Helens, Ore., have stepped up to provide their community with the supplies they need to protect crops and livestock, as well as helping those who wish to raise and cultivate their own food for the first time.
“That has been a learning curve for us. We just try to find out what they need and get it for them,” says General Manager Laken Gortler. “It might be telling them what wood to use to build their own garden bed or how to build a proper chicken coop.”
Dahlgren’s Building Supply dates back to 1955 and is owned by a second-generation family member, Eric Dahlgren. They are currently working with Do it Best to design and build a new 10,000-square-foot store across the street from their existing building to better serve their community and meet this increased demand, especially for farm and ranch products. The frenzy of retail life during the pandemic has slowed down their expansion plans, but they hope to break ground this fall.
Just three years ago, Dahlgren’s began stocking baby chicks and sold a respectable 200 to community members. This spring, they sold more than 3,000 and have seen their farm and ranch sales double since last year.
Gortler describes the business as a hardware store that sells farm and ranch and not the other way around. The current sales floor is 5,500 square feet, but most farm and ranch products like gates and fencing are stored outside.
Dahlgren’s captures 50 percent of its sales from homeowners, 40 percent from pros and 10 percent from farmers, according to Gortler. “Most of the farmers are full time—we don’t have a lot of hobby farmers around here,” she adds.
She says they have quadrupled their chicken and turkey sales and also sold some pheasants and quail. “You get blindsided by the spike in sales. We’ve always had a seed display, but this year we can’t keep it in stock,” she notes.
Lumber and sheet goods remain their top-selling categories, followed by gates from Tarter. “Our feed is up 72 tons compared to last May, and we weren’t expecting that,” Gortler says.
Gortler grew up on a 50-acre farm and keeps horses. Besides her, there are three other employees with a farming background who can lend their expertise. She and Eric Dahlgren do a weekly radio show, and she ends up fielding a lot of questions about horses and farm and ranch issues.
Operating during the pandemic has been challenging, but they were lucky and did not have to close at all and didn’t lose any employees. “We needed all hands on deck. We started curbside pickup for the first time and marked out our signage at six feet,” Gortler says. She adds that employees have all been wearing masks and the state’s governor recently required face masks in indoor spaces open to the public.
Farmers in the area seem optimistic, so Gortler takes that as a good sign for the near future. For now, they are just trying to keep up with the ever-increasing demand for products. “Business has been great and it will be even better once we get into the larger space,” she says.
Serving the Whole Market
Many store owners who specialize in the farm and ranch category are seeing their sales increase while the world adjusts to this new normal. At The Equity Do it Center in Effingham, Ill., they credit their success to the fact that most of their employees, even up to the vice president level, are also farmers themselves.
The Equity Do it center is part of the largest ag cooperative in Illinois, which dates back to 1919. The Equity offers agronomy, grain services, feed and livestock, energy and hardware from 17 locations covering 20,000 square miles. The Equity’s purpose is to help its 9,000 stockholders and 20,000 charge account customers obtain goods and services to farm as efficiently and profitably as possible. Having survived wars, the Great Depression and recessions, they are now dealing with a pandemic.
The Equity may have started out selling coal, hay and feed, but today it is leading the way in agribusiness. The Equity Do it center carries products for homeowners, farmers, hunters and contractors, selling everything from grills, boots and seed to livestock gates, feeders, fencing and their own line of feed.
Hardware Manager Thomas Perkins, who also comes from a farming background, explains their customer mix breaks down to 50 percent from farmers, 20 percent from contractors, and 10 percent from both homeowners and hunters. “We have both full-time and hobby farmers, and we’re definitely seeing more hobby farmers,” he says,
In March, Do it Best helped them complete a total reset. “They helped us to diversify and we expanded into products we didn’t have before,” Perkins says. “Our business has increased every month since COVID. We were curbside only in April and it was still bigger than March. Everyone is working on their yard.”
In the early part of the pandemic, they rotated out on staffing. Employees would work a couple of days and then take a COVID day. After April they returned to regular staffing with their 10 employees—half come from a farm background.
In a typical year, top-selling categories include farm and garden, grass seed, grills, power tools and anything outdoors like bulk feed. “Grills have been crazy. We’ve been selling out as fast as we get them in. We think it was the stimulus money going around,” Perkins says. “Small garden seed is up nearly 200 percent, which is why it’s hard to get.”
Livestock equipment like cattle feeders are kept outside, and they installed a lean-to so farmers can drive up and grab or do curbside. Customers have been very responsive to curbside, according to Perkins, who notes that most have a charge account and can just pull up, grab the items and go.
Everything is uncertain in the farm industry right now, according to Perkins. “We’ve had some rough years in the farm economy since 2012. Farmers are not sure of their income sources with trade deals. We’ve made it through so far, but it’s on everyone’s mind,” he says.
More farmers are getting involved with social media, so The Equity Do it center has started marketing more aggressively on Facebook. “We have Rural King in town and Tractor Supply 15 miles away, so we’re trying to compete with bigger boxes. We compete with our knowledge, because our customers come to us for advice,” Perkins says.
Expanding Delivery Service
Things are looking up at Tractor Supply Company (TSC), which bills itself as the largest rural lifestyle retail chain in the United States. TSC reported net sales rose 7.5 percent in the first quarter and is projecting record sales and earnings for the second quarter, with net sales growth forecast to be 24-29 percent.
In April, TSC announced that same-day delivery is now available in all of its 1,863 locations in the United States, making it the nation’s first major general merchandise retailer to offer same-day delivery from 100 percent of stores.
The expansion comes three years after Tractor Supply initially launched its delivery service partnership with Roadie. Roadie is the nation’s first crowdsourced delivery service, with more than 150,000 verified drivers who cover 89 percent of U.S. households.
With the pandemic boosting demand for delivery service, TSC accelerated the rollout of same-day delivery. Tractor Supply now offers customers the convenience of same-day and next-day delivery on almost the entire inventory from its stores—nearly 15,000 items including livestock feed, dog food, power tools, tillers, riding lawn mowers, chicken coops and more.
“At Tractor Supply, we are committed to being the most dependable supplier of basic maintenance products for farm, ranch and rural customers. Now, more than ever before, our customers are depending on us to get them their essential goods in a timely manner so they can continue to take care of their families, homes, land, pets and animals,” said John Ordus, executive vice president and chief stores officer at Tractor Supply.
In response to the COVID-19 pandemic, Tractor Supply adopted the following initiatives:
- Increase use of mobile POS devices across the chain by the end of April to allow for a more seamless checkout process.
- Implement contactless curbside delivery for Buy Online, Pickup in Store.
- Expedite rollout of contactless payment options such as Apple Pay.
- Introduce first mobile app for Apple and Android devices.
- Increase inventory supply for essential products such as livestock feed, equine feed, pet food and other critical consumable items.
Largest Farm and Ranch Retailers
- Tractor Supply Company, Nashville, Tenn.—1,863 stores
- Rural King, Mattoon, Ill.—110 stores
- Bomgaars, Sioux City, Iowa—94 stores
- Atwoods Farm & Ranch, Enid, Okla.—63 stores
- Fleet Farm, Appleton, Wis.—45 stores
- Runnings, Marshall, Minn.—45 stores
- Blain’s Farm & Fleet, Janesville, Wis.—42 stores
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