ARA 2016: 5 Developments Worth Monitoring Into 2017

ARA 2016 hilton bonnet creekYou can pretty much set your watch to it (do people even still wear watches? I know I do…but I’m old).

Typically after putting the December issue of CropLife to bed (that’s publish industry jargon for finishing an issue) — signifying the end and beginning of yet another seemingly endless editorial calendar here at MMW — a large contingent of of our team usually makes our way through the snow-covered, Planet Hoth-esque Northeast Ohio highways to the airport to board a flight to whatever warm weather city is lucky enough to host the annual Ag Retailers Association (ARA) Conference & Expo.

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This year, that city was Orlando, FL, (great destination if you’ve got a wife and kids eager to tag along, perhaps not so much for the rest of us) and the host hotel was the snazzy Hilton Bonnet Creek (pictured above), just a stone’s throw from Epcot and Animal Kingdom in the tony Disney-founded Central Florida town known as Celebration.

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While the show is not a huge news generator (this year seemed especially slow on that front) for the attending ag media, its ability to attract a large percentage of high-level, executive attendees from across the U.S. ag retail segment keeps it squarely in our annual rotation of “must-visits.”

Now that this author has had some time to ponder and process what we heard down in the Sunshine State last week, here’s a few things that stand out as notable upon further examination:

Everyone is watching Trump

Perhaps I’d already had my fill of political debate for the year after one of my pre-teen nieces greeted me on Thanksgiving at the door and practically demanded to know whether I had voted for “that Trump guy,” but just a little under a month removed from the most contentious U.S. Presidential Election since McGovern-Nixon, the implications to U.S. agriculture of The Donald’s ascension to Leader of the Free World status was a topic many embraced and debated lively over the two day agenda. In my opinion, ARA attendees seemed split into three factions: those that are, to borrow a phrase from University of Michigan crybaby/head coach Jim Harbaugh, “bitterly disappointed”; those that are optimistic a Trump-led administration will lessen the regulatory burden placed on ag retailers by OHSA and EPA and the like; and those that hope the President-Elect appoints a strong, experienced Secretary of Agriculture to his cabinet and “leaves us the hell alone” for the next four years. As of the publishing of this article, it’s still really anyone’s guess what will happen (including our new leader, I suspect. *Ducks head from incoming Pro-Trump projectile*).

What Does “2016: The Year Of Consolidation” mean for retailers in 2017?

Again, another topic of discussion that was bandied about quite frequently all week from the trade show floor to the dinner table, and yet a clear consensus has failed to emerge as to what to expect going forward. Agrium-Potash Corp., Syngenta-Chem China, and Bayer-Monsanto, are all tentatively expected to pass regulator scrutiny in 2017, with the Dow-DuPont merger looking to be the most challenging to complete from a regulatory standpoint (there could be issues with Pioneer and how/whether the new combined company must divest this piece to move forward). Opinions on all of this consolidation seemed to range from retailers will now have even less choice/diversity in product offerings (hard to believe with glyphosate seemingly on its way to the proverbial glue factory), to the consolidations perhaps being a win for some of the smaller CPP players like FMC, BASF and AMVAC. As always, we’ll do our absolute best to stay on top of all the developments in ag industry consolidation going forward into 2017. That, my friends, is something you can take to the bank.

Looking for a Silver Bullet? Look No Further Than Your On-Staff CCA

There are some that see the coming dicamba and 2,4-D tolerant cropping systems as “Silver Bullets” in the ongoing glyphosate resistance battle raging throughout the Corn Belt and Mid-South. And while the new systems certainly have a ton of potential upside in that regard — especially when combined with a long-lasting residual mode of action — one ag retailer we spoke with has other thoughts. “I feel the new tools will be good (for ag) but I always tell people that ‘My CCAs are my Silver Bullet against herbicide resistance.’ They will be the ones that make sure the new herbicides are applied right, and when a grower says, ‘Hey, that recommendation from so-and-so actually worked,’ that’s what really helps that grower-retailer relationship grow. The future of these new tools lies in education, and it’s going to fall onto the retailer to get out and educate the growers and the general public on these AIs.” Couldn’t have said it better ourselves.

PSM Remains In A Holding Pattern

ARA Public Policy Director Richard Gupton and his Beltway-based team have been showered with accolades since achieving a last-minute stay of OHSA’s Process Safety Management (PSM) Standard back in September in D.C. Circuit Court, and with good reason, since various estimates placed the dollar figure of getting into compliance with PSM at anhydrous ammonia retail facilities throughout the Midwest around the $30K per facility level. In a quick chat between sessions in Orlando, Gupton shared with me that one of the next step’s for the agency is looking to recoup some legal costs it incurred in stepping up on behalf of the retail chain, and that the in-coming Trump administration could have a measurable positive effect on whether PSM will hit ag retail in its pockets quite as hard as many expected back in the spring. Still, The Asmark Institute had a booth at the conference, and it is still advising its member retailers to remain prepared for OHSA to implement PSM sometime in the coming years.

2017 Outlook: A ‘Push or Slightly Down’, According to Unofficial Straw Poll

Our own Eric Sfilgoj already wrote about this in his weekly op-ed column, but it should be noted that a quick straw poll among attendees of our annual ARA Roundtable discussion, held in conjunction with the conference, had only one retailer opine that 2017 will be “up” compared to 2016, with the majority of participants expressing the belief that things will be “flat to down” for at least another year. Among the reasons for market pessimism going into 2017 were a 2 billion bushel bumper crop of corn just harvested this fall, ongoing and increasing margin pressure on crop protection products as growers look to non-GMO seed and generics to cut costs, and another year of flat fertilizer margins. The one retailer with a positive view on 2017 said they believe “2017 will be good for the good retailers; the bad ones will get out, and we’ve seen growers spending more and more to get higher yields (to offset production costs). How things play out over the next 12 months though?

That remains anyone’s guess, and also the uncertainty is part of the fun in working in one of the fastest growing and evolving, global industries in the world. So, be thankful for that, as we wind down yet another year. I’d rather face a challenge head-on than be beset by boredom, any day of the week. You could be, I don’t know, a meter maid in Philadelphia or something.

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