A Quiet Uneasiness
The general market buzz seems very calm compared with how well ag is performing.
September 1, 2011
As the season changes from summer to fall, I often reflect back on what kind of year it's been so far. Truthfully, given the general chaos that overtook the market and world during 2008-09 and sense of calm that returned during 2010, I was expecting 2011 to be a return to normalcy.
In some senses, the year has been just that. But with the renewed hope of a return to financial calm and market growth that the year began with, I anticipated a brisk year for agriculture with plenty of market deals, mergers and overall business activity.
It hasn't panned out this way, however. As I write this column, our magazine has just started sending out its annual CropLife 100 forms to the nation's leading ag retailers. In a normal year, I would find somewhere between three and seven companies had disappeared from this listing, swallowed up by larger competitors or merged with similar-sized operations. But in 2011, it seems that 99 of the 2010 CropLife 100 companies are present, with the missing one — Miles Farm Supply — having been sold just as our December 2010 issue was going to press.
Likewise, the general market buzz seems very calm compared with how well agriculture is performing. Commodity prices are up, grower-customers are spending money (even with higher input prices) and everything seems to humming along just fine going into this fall's harvest time. No one it seems is singing too loudly or crying too hard about the state of things.
In other words, it's very quiet.
And, maybe because I've seen too many horror movies in my days, this overwhelming market quiet kind of scares me. Today's business calm reminds me of all those cliché scenes from your average low-budget horror film. The characters enter a dark room or corridor, looking for signs of the lurking monster. One of them will invariably utter the phase: "It looks pretty quiet." To which another more-insightful character will reply: "Yeah, too quiet." A split second later, the monster jumps out from some shadows to the right and all hell breaks loose.
Now that's not to say that our marketplace should be looking for any unexpected "monster" issues to suddenly appear, such as falling commodity prices or uncertainty over the shape the 2012 Farm Bill might take. But with the general economy once again experiencing highs and lows in consumer spending and stock prices, it probably would be wise to keep an eye out for any signs that this kind of volatility is headed our way. Besides, if the ag economy continues to hum along at its current healthy clip, market moves may become more prevalent between now and the end of the year.
It will be interesting to see how all this eventually plays out. Is this the calm before a storm of market activity or are we just settling into a new kind of business pattern where progress is slow and steady instead coming in a series of fits and starts?
In the interim, I think I'll just sit back, watch and be quiet.