Big Picture: Beyond 2011
There are several issues to keep an eye on for ag retailers in the years ahead.
November 17, 2010
Predicting too far into the future can be hazardous. Consider the track record of such movies as 1936's "Things To Come," which speculated that the first moon shot would be hurled out of an extra large space gun, or the TV program "The Jetsons," which forecast flying cars for everyone by the Year 2000.
But making future predictions for the ag retail market is a bit simpler, especially since its focus is a little narrower than the whole of society. With this in mind, ag retailers polled for the 2010 CropLife State of the Industry report say these issues/trends will merit study as the marketplace moves forward through the next few years.
Off The Wal-Mart
Arkansas-based Wal-Mart is the largest retailer in the world, with a projected $405 billion in sales in 2010. This sheer size gives the mega-retailer the ability to dictate to suppliers how they run their operations and provide products for its stores. In recent years, this has included sustainability pledges and stringent recordkeeping, detailing how Wal-Mart-destined items go from source to store shelf.
Some market observers say these kinds of demands from Wal-Mart will ultimately ripple back to the ag retail level of doing business when it comes to produce and finished food products. "It may drive more traceability back to the retailer, which will heighten the need for us to work with our customers closer on recordkeeping," says Wade Blowers, COO for Hamilton Farm Bureau, Hamilton, MI. "It may present an opportunity for the retail channel to bring more value in support of the customers who will sell local products to the local distribution channel."
Other retailers, however, aren't so sure Wal-Mart's impact will be that great — at least in the near term. "In the short term, I don't see much impact in the corn and soybean producing areas," says Doug Busdeker, area general manager, farm centers for The Andersons, Inc., Maumee, OH. "Long-term, I expect to see more tracking required of pesticides and fertilizers applied to all crops."
When Push Comes To Shove
Although the majority of retailers polled for the State of the Industry report were confident 2011 would be a good year for the industry, we asked what crop inputs and/or services might suffer if the market was down instead. If this happens, fungicide application is projected to pull back the furtherest, according to 27% of respondents, with fertilizer use a close second at 25%.
Looking further down the road than just 2011, most retailers are confident agriculture will enjoy a positive future. "People have to eat and grain and cattle prices are good, so growers and ranchers will continue to produce," says Frank Schumacher, agronomy division manager for Mountain View Co-op, Black Eagle, MT.