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Mega-Mergers could complicate ag retailer rebates

 

A new report from CoBank says farm retailers will see the most change from mega-mergers in agriculture.

CoBank economist Will Secor tells Brownfield while retailers might want manufacturer rebate programs to be simplified or eliminated, mergers could make them more complex to incentivize seed, crop protection and data product purchases.  “With more complete portfolios, the manufacturers are incentivized to tie together more products to increase cross-selling, and then because of their new-found size, they’re going to increase volume requirements to take advantage of that size.”

Secor expects the greatest changes farmers could see this year to be to service and personnel, but 2019 rebates could get complicated.  “For crop protection products, you already see some of that complexity where a lot of these rebates are product by product and sometimes these rebates get stacked together with other products and so it’s creating this matrix of rebate structures to try and understand your final rebate.”

He says because Dow-DuPont, ChemChina-Syngenta and Bayer-Monsanto all needed to divest significant assets to merge, product price increases should be limited short-term.

AUDIO: Interview with Will Secor