Ag Retail Outlook Positive For 2013
Many in the ag retail industry feel the good times of the last three years will continue well into 2013 and beyond.
December 3, 2012
As anyone in the sporting world will attest to, there’s only one problem with winning streaks — they eventually come to an end. No matter how dominate a team or skilled the players involved, inevitably they will have a bad day or just be unlucky, resulting in a loss.
This is a lesson many market watchers think agriculture should pay attention to. Since the dark days of mid-2008 and 2009 — when high fertilizer prices led to a severe downturn in ag retail fortunes — retailers have enjoyed three relatively prosperous years. Better yet, these gains have come in exceptionally wet seasons (as in 2011) and unseasonably dry ones (as happened this year). No matter what curve balls Mother Nature has thrown, ag retailers and their grower-customers have been able to overcome these obstacles and largely thrive.
And right now, many in ag retail think this unprecedented winning streak for agriculture will continue well into 2013. “The outlook for 2013 looks good,” says Gordon Cockrum, crop protection manager for The McGregor Co., Colfax, WA. “Commodity prices look strong and growers are excited about farming and the future.”
This level of optimism for 2013 is borne out by other member companies of the CropLife 100 as well. In the 2012 annual survey of the nation’s top ag retailers, CropLife magazine asked respondents to rank their confidence in the fortunes for 2013 on a scale of one to 10 (with one being very negative and 10 being very positive). Of the 90 retailers to answer this question, the vast majority (79%) thought that 2013 would rate a seven to 10 in terms of growth. Another 13% believed that the year would be average in overall growth, rating it between a five and six. Only 8% believed 2013 would be a “down” year in terms of revenue, rating it between a two and a four. Significantly, however, not one of these 90 ag retailers gave 2013 a very negative mark (one).
Among some of those surveyed, CropLife 100 retailers thought there were some after-effects from the nationwide drought that hit agriculture during mid-2012. “It slowed the end-of-year sales and is making producers cautious for next year,” wrote Lane Mielke, sales manager for North Central Farmers Elevator, Ipswich, SD.
Other respondents indicated that their grower-customers were waiting a bit before proceeding with their 2013 plans because of the drought’s impact on their operations. “Our customers have been slow in making decisions until after they receive their insurance checks,” wrote Dennis Montavon, general manager for Effingham Equity, Effingham, IL.
Despite this slowness, however, the general feeling among CropLife 100 retailers is that 2013 will be “another winning year” for agriculture. “I think things will continue to stay positive for next year,” says Matt Hynes, manager, agronomy marketing for GROWMARK, Bloomington, IL.
Sfiligoj is the Editor for both CropLife and CropLife IRON magazines. He travels regularly to cover industry events and has been dedicated to the ag retail industry since he joined the staff in 2000.