State Of The Industry: Ag Retailers Center Of Influence For Growers
Ag retailers who fully engage their grower-customers in managing both opportunities and challenges will be key in building sustainable businesses.
February 4, 2013
As the final decade of the 20th century wound down, a media-driven panic over the approach of “Y2K” and the possible effect on electronic devices kept entire industries busy trying to avert a technology meltdown. Behind the scenes in ag, however, a far more profound event was unfolding that would turn the industry on its head in less than a decade: The Roundup Revolution.
In the beginning, it wasn’t always clear that it would be able to deliver on the promise of ease of use and equal or better yields than its conventionally bred competitors. But deliver it did.
As each year in the first decade of the 21st century unfolded, the impact of simplified weed and insect control hit harder and closer to home for the ag retailer. Herbicide and insecticide programs collapsed, taking multiple billions of dollars in sales out of the market. Seeing little hope of profit in new product development, crop protection research and development was pulled back at most companies and shuttered altogether in others.
A generation of farmers, consultants and agronomy students — which some old school agronomists and product managers refer to as “glyphosate babies” — saw advanced weed control become defined as “another application of Roundup.” And, as one retailer quipped, “it made really good farmers out of really bad ones, to be frank.”
And adding insult to injury, at least for the retailer, the rapidly maturing and accessible Internet brought price transparency to farmers and served to chew up what little profit was available in crop protection products. Consolidation slashed the number of manufacturers and distributors across the country, leaving those left standing to figure out how to sustain their businesses in a rapidly commoditized industry.
The Road Back
Looking at agriculture today, it’s hard to imagine that the market outlook was so dismal not so long ago. But today, the full-service retailer finds himself directly in the center of influence with grower-customers, who now operate their farms with unprecedented opportunity coupled with unprecedented risk.
Mother Nature has spurned the old Roundup Ready system, driving Monsanto to accelerate improvements and creating openings for competitors to provide alternatives. And insect resistance in Bt crops is also a growing issue.
Simultaneously, emerging complexities are complicating the practice of farming further, including global competition, increasing commodity crop demand and rising exports, comprehensive fertility management that is driven both by building yield and preserving watersheds, technology implementation, rising input costs and increasingly sophisticated grower customers to serve.
For the retailer who is ready to fully engage the grower and his suppliers has a world of opportunity ahead, and the state of the industry is indeed strong.
Schrimpf is the Group Editor for the CropLife Media Group at Meister Media Worldwide, with full editorial responsibility for CropLife, CropLife IRON, Cotton Grower and PrecisionAg Special Reports.