Unpredictable sales and weather did little to dampen demand for tanks and updated containment.
October 7, 2009
In spite of this year's wet weather and drop in fertilizer prices, tank and containment makers could report a solid season, with optimism for the coming year. Ron Lager, sales manager with Precision Tank & Equipment Co., says he is hopeful for good harvests and crop income, thanks in part to seed performance. "I was surprised at how rapidly the crops recovered from the terrible spring weather. It truly is remarkable how hardy the new seed varieties are," he says.
Now that fall is here, "the more aggressive, forward-thinking dealers are making purchases," says Dennis Neal, president of Enviropac, Inc. He reports some regions had lower or postponed tank sales, but 2009 saw business on par with 2008 — a very good year for the company.
Neal found that dealers were more concerned than ever about rust and corrosion in steel tanks. "With the major changes in fertilizer prices, the source of supply continues to bring in product that more aggressively attacks steel tanks," he says. Hence, he says Enviro-Coat Rust Resister has been in high demand as dealers look for ways to protect their current tanks. In fact, more corrosive fertilizer stocks in 2009 have also led to increased demand for fiberglass tanks — the units don't rust and are maintenance free, says Neal. "Our fiberglass tanks continue to lead in our sales as dealers continue to look to longer-term, lasting assets."
After adding 33,000 square feet of production space at its Sullivan, IL, facility in May, Mid-State Tank is optimistic about business in both its ag and non-ag (fuel, de-icing) markets. J.R. Ray, general manager, says the addition will allow the company to produce large-diameter steel tanks — with capacities of up to 30,000 gallons. "It's a market we can go after aggressively now," he says.
In mid-September, Ray noted that buyers in general were just starting to show interest for 2010 storage. He reports that Mid-State's business saw no slow time at all last season, but he anticipates a more normal sales cycle, with a busy December through April ahead. "Everybody is waiting to see with the volatility in the fertilizer market and other input prices," he says.
Says Precision Tank's Lager: "Considering all the negative factors, we had a very good year with solid sales across all of our products." The company offers a full range of stainless steel storage and field-use tanks.
Customers looking at multiple uses for tanks on-farm have been buying Meridian Manufacturing's bins. The smooth walled, all-welded hopper bottom bins can be used for storage of dry fertilizers, liquid fertilizers, seed, feed, water and more.
In fact, both tank and containment suppliers saw the trend shift to more grower business. Ken Hunter, president of Hunter Agri-Sales, reports that sales of his company's Plia-Dike system for on-farm secondary containment "were significantly higher partly due to the uncertainty of fertilizer prices and availability." In dealerships, Hunter continues to see 15- to 20-year-old concrete dikes that are showing signs of cracking and deterioration. To help, the company recently added a new wall system option of straight, galvanized wall panels available in various heights to the Plia-Dike line.
Hunter's Plia-Pad system with the new aerial kit has been a strong seller this year as well as last. "I would say Illinois and Iowa regulations have certainly helped make the aerial Plia-Pad our hottest product his year," he says.
How About 2010?
Tank and containment experts are optimistic about the 2010 season. "We are hopeful renewed interest in biofuels will help bring grain prices up. That, along with some stability in the fertilizer markets," says Hunter.
"If the political malaise we are in would settle down, business will continue to grow," Neal says. "Dealer fertilizer and chemical inventories will play a major role in their overall purchases of other products in 2010."
Lager has concerns for future legislation. "Current regulations, while burdensome, are not as worrisome as the proposed Cap and Trade programs and restrictions on fall-applied nitrogen will be for our industry, if enacted. Either could have devastating effects on the ag industry as a whole."