Can Technology Help with Sales and Contracting Challenges in U.S. Agriculture?

Are you amongst the many farmers in the U.S. who are struggling with sales and contracting? If yes, then you are not alone. Although it is essential, according to USDA, only 8.1% of U.S. farms use contracts to secure their pricing, minimize risk, and stabilize income.??

Farmers are highly vulnerable to unexpected price fluctuations, supply chain issues, and legal disputes in the absence of solid agreements.

But how can farmers secure good and profitable deals and guarantee long-term sustainability for their business???

Challenges in Sales and Contracting in U.S. Agriculture?

Sales and contracting hold the key to profits in the face of uncertainty, in agriculture. Good contracts and sales shield you as a farmer from the wrath of many risks and challenges.

However, these come with a unique set of hurdles, from unpredictable pricing to complex regulations. Here are some of the biggest challenges farmers face when it comes to sales and contracting:?

Market Price Volatility?

Market Price variations are a never-ending struggle. Studies by USDA show that price risk is responsible for most income uncertainty in farming, but contracts can reduce a huge 90% or more of price risk and even eliminate some yield risk.??

Contract Disputes & Legal Complexities??

Business Contracts can be a tricky business! Farmers very often end up signing agreements without fully comprehending the terms. This leads to disputes over pricing, quality standards, or delivery schedules.?

Supply Chain & Logistics Issues?

Supply chain and logistics are the bloodline of agriculture! Issues in transportation and logistics adversely affect farm profitability.

A study by Choices magazine found that bottlenecks at Louisiana ports caused a 3.9% drop in agricultural exports, resulting in $563.9 million in economic losses in just six months.??

Dependence on Intermediaries?

Commonly known as the middlemen, are exploiting farmers a great deal for ages. Farmers, especially smallholders, are constantly exploited by middlemen, retailers, and brokers who take a major cut of their already meager profits.

Smallholder farms contribute to around? 80% of the global food supply, but, unfortunately, they face unfair pricing and limited access to the direct market.??

Regulatory & Compliance Challenges??

Farmers have to comply with a huge number of complex regulations. Such as the Clean Water Act, the Food Safety Modernization Act, and various labor laws. Cherry on top, then continuously changing policies make compliance a major burden that is difficult to carry.?

Risk of Contract Farming?

Over the past 25 years, the use of marketing and production contracts in U.S. agriculture has reduced from 13% to just 7%, which is a significant fall. Many farmers now think twice before signing up for contracts due to restrictive terms and uncertain benefits.

Limited Access to Financing & Insurance??

For farmers, getting financial assistance to start a new initiative is a huge benefit. But, getting adequate loans and crop insurance is a huge challenge. A large percentage of farmers face difficulties in getting credit, owing to the rigid lending criteria and soaring costs of insurance policies.??

Technology Adoption Barriers??

Regardless of its immense advantages, the number of farms adopting digital farm management tools is low. 52% of North American farmers have reported costs as their biggest challenge, and 40% struggle with unclear return on investment.?

Sustainability & Environmental Pressures??

A survey by McKinsey found that 90% of farmers know about sustainable practices, but only a few have integrated them fully into their operations. This is mainly because of high costs and lack of incentives.??

Lack of Market Transparency?

Access to real-time insights about farm market prices, buyer demands, and global trade trends can be a game changer for farmers, but unfortunately, many farmers do not have them. This lack of access makes it difficult for them to negotiate fair prices and plan smart future sales.??

Can ERP Farm Management Software Solve Sales and Contracting Challenges in the U.S.???

Technology is reshaping and revamping the face of agriculture. Farm management software is the latest development giving a kick-off to agriculture.

Their use is forecasted to grow from $3.4 billion in 2024 to $5.8 billion by 2029! Powerful ERP systems like AgriERP have become farmers’s right hand and they are streamlining their sales and contracting processes.??

Price Management & Market Analytics??

By using information regarding real-time pricing, farmers can easily track market trends, forecast future demand, and negotiate beneficial deals with buyers.??

Smart Contract Management??

Automated contract tracking makes the entire process transparent and minimizes legal risks. It guarantees that farmers have clear terms, standardized agreements, and safe digital signatures.??

Automated Order & Delivery Tracking?

With the help of automated order and delivery tracking, farmers can monitor shipment progress in real-time, minimize delays, and boost customer satisfaction. AgriERP provides high visibility into every stage of the supply chain.??

Direct Sales via Digital Marketplaces?

Farmers can sell directly to buyers by using digital platforms, this eliminates the part played by intermediaries, hence improving their bottom lines to a great extent.

Automated Compliance Tracking??

ERP systems enable farmers to comply with USDA and regulatory guidelines. This way they can prevent hefty penalties and costly legal issues.??

Transparent Contract Management?

Farmers lower the chance of disputes by having complete visibility of buyer commitments, payment dates, and contract terms and conditions.??

Financial Management & Loan Integration??

Financial tools integrated into the ERPs can help farmers secure loans, track expenses, and manage their cash flow efficiently.?

Mobile & Cloud-Based ERP?

Mobility and access have become a critical element for people belonging to any walk of life. The same is the case for farmers, they can access farm management software from anywhere and at any time with the help of mobile apps to monitor operations, manage contracts, and track finances on the go.??

Sustainable Farm Management??

Sustainability is the lifeblood of farming. With the help of built-in sustainability tracking, farmers can implement environmentally friendly practices while staying highly profitable.??

Real-Time Market Insights & Sales Analytics

By employing AI-driven analytics, farmers can make data-driven decisions to refine their pricing, contracting, and sales strategies. AgriERP provides real-time insights to improve business outcomes.??

Conclusion??

Farmers these days are faced with huge challenges in sales and contracting, starting from price volatility to supply chain problems.

ERP software offers a practical, and technology-led solution to make every process highly efficient. This way farmers can reduce risk, boost profitability, and secure better and safer contracts.??

However, a major hurdle still happens to be the adoption of digital solutions. Costs, learning curves, and ROI concerns still stand in the way of many farmers from milking upon the benefits of modern technology.

However, with market trends shifting and AgTech advancing, the future of farm sales and contracting is shining bright.

What Do You Think???

What is your biggest challenge in sales and contracting? Have you tried digital tools or ERP solutions? We want to hear your thoughts! Share your views in the comments and?subscribe to our newsletter for the latest updates on farming solutions.