None of us expected what happened these last 18 to 20 months.
September 9, 2010
Has everything we knew about our business and the world-at-large shifted? Based upon what experts are saying and I’ve heard first-hand, I think the answer is yes.
At a recent industry meeting, Jay Vroom, CEO/president of CropLife America, uttered the following observation: “After the election of 2008, we knew we were in for change. But none of us expected what happened these last 18 to 20 months.”
The facts concur. While compiling information for this month’s CropLife®, I spent many hours chatting with friends in the retail, production and equipment channels. Given that most economic gurus have said the Great Recession is over and the high crop input prices that virtually shut down application work during late 2008 and early 2009 are a thing of the past, I fully expected to hear that the ag retail world was “back to normal.” This would translate into higher crop input sales, more application work being done and a general sense of relief being sighed by everyone.
To be truthful, I’ve heard plenty of sighs. However, most of these were ones of confusion rather than relief. As you will read in the story Climbing Back, the overall mood for fertilizer is positive, but retailers are still trying to figure out how to hedge their risks when it comes to keeping products in inventory. This has made just-in-time delivery to grower-customers the new standard.
“I’ve been looking for signs that the marketplace is getting back to normal. So far, I haven’t seen that normal side yet,” said one Midwestern retailer.
A similar shift seems to be taking place in crop protection. Once upon a time, some were predicting a permanent end to the problem of yield-sapping weeds. The combination of glyphosate and glyphosate-resistant crops would conquer all, said the experts.
But Mother Nature has proved to be a more resilient engineer of weeds than mankind could have ever imagined. Today, there are almost one dozen varieties of glyphosate-resistant weeds. More are certain to appear. I was told by one crop production representative at a recent meeting that in some Southern cotton fields last year, resistant Palmer pigweed had become such a problem to control that approximately 70% of these fields had to be weeded by hand. “This puts us back using production methods that were employed in the 1970s,” said the representative.
Also, although the recession is over and companies are again making money, they aren’t investing it in workers. Reportedly, the nation’s top companies are sitting on $837 billion in cash reserves. This amount could employ 2.4 million workers at $70,000 annual salaries for five years.
This all seems to indicate that a major shift has happened in our world. The fact that fertilizer bins are not filled to capacity before the season starts and growers are being forced to hand weed entering the second decade of the 21st century do seem like some pretty significant shifts. Given these facts, I would stay tuned for even more shifts to happen ahead …