CropLife 100: Custom Application Report

It’s been giddy times for Big Iron these past two years. During 2007 and 2008, respondents in the annual CropLife 100 ag retailers survey indicated that their custom application revenues were up, grower-customers were spending money, and fungicide application work was helping to expand application options. Needless to say, everyone was very content with how this part of their business was rolling along.

Then the industry hit a serious speed bump toward the end of 2008. High fertilizer prices coupled with dropping commodity values put up a serious stop sign for growth. This was followed by an extremely wet spring season, with crop plantings in some parts of the country stretching almost to the start of summer.

Given these developments, it probably will surprise no one that overall custom application revenues were down in 2009. According to data compiled from CropLife® magazine’s annual CropLife 100 retailers survey, custom application sales declined 9% to $763 million. Even more telling, in the 2008 CropLife 100 survey, 71% of respondents said their custom application business grew 1% to 5% for the year, with only 6% experiencing a 1% to 5% decline. In 2009, the percentage of ag retailers seeing 1% to 5% growth for their custom application business dropped to 49%. Furthermore, almost one-third of respondents said this portion of their operation had a sales decline of 1% to 5%.

Less Fungicide Profit

To understand why this drop took place, you need to look no further than fungicide application. As the use of fungicide application as a preventive against disease began to take off during 2007 and 2008, ag retailers were reaping some significant rewards. In 2008, for example, 86% of the retailers polled in the CropLife 100 survey indicated this part of their custom application business was providing a “significant profit potential” for them.

During 2009, however, this percentage took a major hit, dropping to only 9% seeing a profit. Instead, 28% now say fungicide applications in 2009 made them less profits vs. the prior year. Another 53% of those polled said this part of their business was flat.

All the 2009 marketplace street lights weren’t red for custom application, however. Conventional wisdom among market analysts has always been that precision agriculture practices would perform well in a down year because of their inherent ability to target crop input use and save grower-customers money.

This apparently panned out. For 2009, said CropLife 100 respondents, site-specific revenues increased from $145.2 million in 2008 to $164.9 million, a jump of 14%. Despite this fact, only 43% of ag retailers surveyed said precision agriculture sales were up 1% to 5% for their operations, down 10% from the 2008 total of 53%.

Machine Wars

On the self-propelled sprayer side of the picture, AGCO brands (including Ag-Chem and Spra-Coupe) continue to be the most popular models in CropLife 100 ag retail fleets. For 2009, respondents said 75% of their sprayers were painted in the company’s distinctly yellow hue. This represented a slight decline from the prior year, where Ag-Chem RoGators tended to make up approximately 80% of existing sprayer fleets.

Coming in second among sprayer models were ones sporting John Deere green at 67%. Again, this percentage marked a slight drop (5%) from 2008’s 71% figure.

The news was much brighter for red sprayers in 2009. According to figures from the CropLife 100 survey, 57% of ag retailer units were provided by Case IH. This represented a significant 7% increase from the 2008 total of 50%.

But the biggest mover in percentage among sprayers in 2009 belonged to Hagie Manufacturing. In 2008, only 12% of CropLife 100 ag retailers had Hagie yellow sprayers in their grower-customers’ fields. In 2009, this figure more than doubled to 25%.

For the other two major sprayer manufacturers — GVM and Miller-St. Nazianz — 2009 was a year of opposites. Whereas the percentage of GVM sprayers in CropLife 100 fleets dropped 1% to 17%, the number of Miller sprayers increased 6% to 13%.

Still, the most scary news for ag sprayer makers comes not from how many units are currently in the nation’s ag retail fleets, but how few might be joining them in 2010. For the past several years, the CropLife 100 survey has asked respondents to say which company sprayers they were planning to purchase in the coming year. Normally, the top end of this group falls within the high 40% range. This year, however, the highest percentage of planned purchases was 38%, being recorded by both AGCO and Case units. Another 33% said they plan to buy sprayers made by John Deere in 2010.

Significantly, the number of ag retailers planning to forego any sprayer purchase in the new year has expanded. In a normal year, perhaps one in five respondents say their company isn’t planning equipment buys in the year ahead. In 2009, however, this percentage jumped to 33%. In other words, approximately one in three retailers don’t plan to purchase new sprayers in 2010.

Leave a Reply

CropLife 100 Stories

Olson Ag Enterprise
CropLife 100Wilbur-Ellis Acquires Nebraska Seed Retailer
January 13, 2017
Wilbur-Ellis’ Agribusiness, a recognized leader in precision agriculture technology and the distribution and marketing of plant protection, seed and nutritional Read More
Jeff Troike Ceres Solutions
CropLife 100Troike Named CEO Of Newly Formed Ceres Solutions Cooperative
January 6, 2017
Jeff Troike has been named President and CEO of the newly formed agribusiness known as Ceres Solutions Cooperative. Ceres Solutions Read More
CropLife 100GROWMARK Acquires L.T. & E., Inc.
January 6, 2017
GROWMARK acquired the assets of L.T. & E., Inc., a family owned and operated tank and truck manufacturer and repair Read More
Growmark FS Outlet
CropLife 100GROWMARK Acquires Propane Terminal In New Hampton, IA
January 4, 2017
GROWMARK has acquired a propane terminal in New Hampton, IA. The facility has 11 tanks with nearly one million gallons Read More
Trending Articles
AgriSync
Matt Hopkins17 Agriculture Apps That Will Help You Farm Smarter In 2017
December 9, 2016
Ag professionals are working smarter, not harder, than ever before. Smart farming technologies have enabled them to reduce costs, maximize Read More
R4023 Sprayer, John Deere
CropLife 100Ag Retail Equipment Report: The Green Party Continues
December 7, 2016
In the annual race for sales in the ag retail equipment marketplace, the color schemes for participants are a little Read More
Mike Stern
Precision AgClimate Corp. CEO Talks Retailer Support For Digital Ag
December 1, 2016
CropLife Magazine’s sister publication, AgriBusiness Global, recently sat down with Mike Stern, CEO of The Climate Corp., following the Monsanto subsidiary’s Read More
Precision AgTrimble Debuts End-to-End FMIS Platform
November 28, 2016
October’s inaugural PrecisionAg Vision Conference left this author with many thoughts and things to ponder in the coming months. Probably Read More
CHS Primeland
CropLife 100The 2016 CropLife 100 Report: Reviewing The Many Bulls And Bears Impacting This Year’s Marketplace
November 28, 2016
For virtually all of 2016, the nation was wholly focused on the big Presidential election. Some folks aligned themselves with Read More
Monsanto sign
Crop InputsMissouri Governor Meets With Bayer CEO To Discuss Monsanto Merger
November 21, 2016
Missouri Gov. Jay Nixon visited Bayer AG global headquarters in Leverkusen, Germany, on November 18 to discuss the proposed Bayer-Monsanto Read More
Latest News
Andersons Retail Store
UncategorizedThe Andersons To Close All Retail Stores; Shutdown Does…
January 16, 2017
In a stunning announcement to the Toledo area, The Andersons Inc. said on Sunday that it would close its two Read More
Trimble TMX-2050 In-Cab Display
Eric SfiligojPrecision To Lead Agriculture In 2017?
January 16, 2017
Another new year is upon us! And I’m certain I speak for many in the agricultural world when I say Read More
Corn
Eric SfiligojThe Mood From Madison? In A Holding Pattern
January 16, 2017
Last week, I had the chance to attend the annual Wisconsin AgriBusiness Classic show in Madison, WI. It’s been a Read More
Syngenta Sign
Crop InputsAccenture Helps Syngenta Transform Its Global Logistics
January 13, 2017
Syngenta, a leading agriculture company, has collaborated with Accenture to design and implement a new digital logistics operating model across Read More
Fall Creek Seth Harden The Nature Conservancy
StewardshipLocal Farmers’ Watershed Initiative: Continuous Improve…
January 13, 2017
The goal in the Big Pine Watershed Project is to more intentionally do what local farmers and responsible ag retailers Read More
HerbicidesEPA Expands Enlist Duo Herbicide Registration To 34 Sta…
January 13, 2017
The U.S. EPA has expanded the geography for application of Enlist Duo herbicide from 15 to 34 states. This means Read More
Olson Ag Enterprise
CropLife 100Wilbur-Ellis Acquires Nebraska Seed Retailer
January 13, 2017
Wilbur-Ellis’ Agribusiness, a recognized leader in precision agriculture technology and the distribution and marketing of plant protection, seed and nutritional Read More
ManagementDeere-Precision Planting Update and the Ag Secretary Wa…
January 12, 2017
Editors Paul Schrimpf and Eric Sfiligoj provide the latest on the court date for John Deere/Precision Planting and the quest Read More
Monsanto sign
Seed/BiotechMonsanto, NRGene Form Agreement For Big Data Genomic An…
January 12, 2017
Monsanto Co. and NRGene have announced that the companies have reached a non-exclusive, multi-year global licensing agreement on NRGene’s genome-analysis Read More
AGCO Custom applicator
SprayersAGCO, Asmark Institute To Offer Training For Beginning …
January 11, 2017
AGCO Corp. and the Asmark Institute are collaborating to offer a new training program dedicated to educating and developing custom Read More
ManagementAg Land Values In Limbo In 2017
January 10, 2017
Several factors will come into play in 2017 that will determine the direction of land values. Randy Dickhut, senior vice Read More
Industry NewsPattison Agriculture Positioned To Be Leading Canadian …
January 10, 2017
Pattison Agriculture Limited (Pattison Agriculture), a division of The Jim Pattison Group (the Pattison Group), has announced the merger of Read More
Fertilizer Tender close-up
MicronutrientsHow Micronutrients Fit Into 2017 Fertility Plans
January 10, 2017
Where do micronutrients stand going forward in fertility plans? For one thing, Tim Mundorf, Field Representative with Midwest Laboratories, says Read More
Fertilizer application
State of the IndustryCautious Optimism On Fertilizer In 2017
January 10, 2017
What kind of fertilizer rates are growers and retailers looking at in 2017 and beyond? According to stakeholders CropLife magazine Read More
Asmus Farm Supply crop protection products in storage
State of the IndustryCrop Protection Products Market: Complexity Begets Oppo…
January 10, 2017
While other key market segments in agriculture continue to see tumultuous shifts in sales volumes going forward (large equipment sales are Read More
RoGator RG1300B AGCO
Sprayers10 Sprayers That Will Showcase The Latest Application T…
January 10, 2017
Sprayer manufacturers continue to step up their games with the latest in application technology. From direct injection systems and four-wheel Read More
Soybean Field
FungicidesGrowers Report Yield Boost, Extended Residual Disease C…
January 9, 2017
With the new growing season around the corner, it’s time to start thinking about inputs for 2017. As growers weigh Read More
Donald Trump
Eric SfiligojTrump’s New Ag Secretary Coming Soon?
January 9, 2017
As agricultural experts are quick to point out, incoming President Donald Trump largely has the nation’s growers to thank for Read More