CropLife 100: The Good, The Bad, And The Ugly

There’s no simpler way to say it: 2009 was one for the ages. Years — perhaps decades — from now, market observers and financial analysts will look back at the year that is just finishing up as one of the most turbulent and unsettled times in the history of the U.S. Going forward, 2009 will most likely be talked about in the same fashion as 1929 and 1973-74 (for those in the agriculture market) are in other financial circles as a watershed time when everything shifted in an entirely new direction.

Given this backdrop, you can appreciate just how nervous CropLife magazine’s editors were in mid-July 2009 when they first started sending out forms to gather ag retailer data for the 26th annual CropLife 100 ranking. Would retailers, reeling from massive fertilizer write-downs during the last part of 2008, see their input sales nosedive by 30%? 50%? Could the CropLife 100 see dozens of companies exit the listing, swallowed up by seas of red ink and/or Chapter 7 liquidations? Would anyone even return a severely negative 2009 CropLife 100 form? These and many other questions loomed large as the first forms hit mail and e-mail boxes.

Somewhat Good News

In the end, however, the news wasn’t that bad. Following the industry record-setting mark of $19.1 billion revenue in 2008, the 2009 total was off only slightly to $18.9 billion (a little over 1%). While it’s true that a $200-million drop in income for the calendar is nothing to cheer about, early projections from ag retail market insiders during the summer months of 2009 indicated that sales were likely to fall to their pre-2007 levels — to somewhere north or south of the $15 billion range. The fact that this didn’t happen is a testament to the ability of most ag retailers to work through these challenging times and adapt their business models accordingly.

Of course, seeing a significant sales increase in one input sector didn’t hurt, either. As we pointed out in last year’s CropLife 100 report, 2007 and 2008 were unusual in that all four input/service sectors — fertilizer, crop protection, seed, and custom application — recorded sales increases from their year-before figures. In this sense, 2009 was a less than stellar year for ag retailers, with three of the four tracked sectors losing financial ground from the prior year. The only exception to this widespread trend occurred in the seed segment. Here, revenue in 2009 increased 18%, from $2.2 billion in 2008 to $2.6 billion. Market share for seed among all inputs/services also grew, up 1% to 13%. This means the seed category has increased its overall inputs/services market share 5% since the start of the decade. Looking at the bigger picture, the success of seed in 2009 effectively cancelled out sales losses in a few other segments.

Pretty Bad

Speaking of fertilizer, perhaps no other category of the inputs/services marketplace experienced a rougher year in 2009. Following a huge spike in prices/revenues during the booming 2007/early 2008 time frame, the fertilizer segment had managed to grab a 50% market share compared with to its input/service brethren. Conventional wisdom at the time had fertilizer soaring ever higher, surpassing the $10 billion mark in the coming years and steadily moving closer to a 55% market share.

Then, in 2009, fertilizer returned to earth with a loud thud. For the year, sales were down $300 million, from $9.5 billion in 2008 to $9.2 billion. This drop also saw the fertilizer category’s market share decline from 50% in 2008 to 49%. Essentially, wrote CropLife 100 retailers, virtually no fall fertilizer was applied during 2008 and a wet spring in 2009 — coupled with grower-customer reluctance to purchase higher priced fertilizer types — kept revenues from moving forward.

For the crop protection product category, the news was also negative. On the heels of a record revenue year in 2008, this segment saw its sales decline $100 million, from $6.5 billion to just below $6.4 billion. On the plus side, the crop protection product category was able to maintain its market share of the total inputs/services pie at 34%.

Finally, the custom application category was also bitten by the down income bug. For 2009, sales in this category declined 9%, from $837 million in 2008 to $763 million in 2009. Market share remained flat at 4%. Significantly, however, CropLife 100 ag retailers reported that income for their precision agricultural services increased in 2009, growing from $145 million in 2008 to just shy of $165 million.

Now for some of the more frightening news from this year’s CropLife 100 survey. For the past several years, the survey has asked ag retailers to tell us if their sales in nine different ag input segments were up 1% to more than 5%, flat, or down 1% to more than 5%. In 2008, the news in this area was extremely positive, with eight out of the nine tracked segments being up more than 50% for survey respondents. Better still, three segments — crop protection, fertilizer, and biotech seed — saw increases among retailers of more than 90%. Only traditional seed fell below these averages, with a mere 36% of respondents seeing sales increases in this category.

In 2009, it was an entirely different story. For the year, only four of the nine segments — biotech seed, adjuvants, seed treatments, and crop protection products — were above the 50% positive sales mark (each in the 60% range). All the others were below 50%, with traditional seed continuing to bring up the rear position at 20% with positive sales.

The biggest change occurred in the fertilizer segment, not surprisingly. Whereas 90% of CropLife 100 retailers recorded sales gains in fertilizer during 2008, only 39% could say the same thing in 2009. More troubling, 57% of those polled had fertilizer sales declines of 1% to more than 5% — by far the highest percentage of sales losses among the nine input segments.

Very Ugly

Considering how badly many ag retailers suffered in 2009, sales-wise, conventional wisdom would have predicted dozens of companies would have closed up shop/merged with neighbors. This did happen, but it wasn’t a widespread phenomenon. In all, only two retailers — Ripon Farm Service and Myers — merged with larger entities. But there was one significant asterisk to this group. Eldora, IA-based United Suppliers — a 20-year member of the CropLife 100 listing with annual sales in the $100-million range — exited the retail market, selling its 40 outlets to neighboring dealerships.

Still, compared with historic input sales levels, the 2009 numbers weren’t that bad. It’s just that, as many retailers have noted, 2007 and 2008 were “two of the most profitable years ever.”

This attitude was further reflected in the 2009 survey. When asked to compare their profitability level in 2009 vs. 2008, 64% of respondents wrote it was identical for both years. Only 17% said they were less profitable in 2009 vs. 2008 — a fact which bodes well for the market in 2010.

Editor’s note: CropLife magazine would like to thank all the CropLife 100 retailers for helping make this report possible. We appreciate your time spent filling out our annual survey form.

Leave a Reply

One comment on “CropLife 100: The Good, The Bad, And The Ugly

  1. What were the combined sales of the CropLife 100 over 1 billion in sales retailers? It was not listed this year as it was in the past.

CropLife 100 Stories

CropLife 100CHS To Build $3 Billion Fertilizer Plant In North Dakota
September 5, 2014
The fertilizer plant in Spiritwood will be the single largest investment in CHS history, as well as the single largest private investment project ever undertaken in North Dakota. Read More
CropLife 100BRANDT Acquires Lemon Ag Services
August 4, 2014
The acquisition of Lemon Ag fits BRANDT’s aggressive corporate strategy of providing superior agronomic advice and services for customers in central Illinois. Read More
CropLife 100Wilbur-Ellis To Relocate Agribusiness Division To Denver
July 16, 2014
The move Eastward will allow Wilbur-Ellis’ Agribusiness Division to be more accessible to relevant geographies and is expected to enhance communication and collaboration among the division’s nearly 3,000 employees. Read More
CropLife 100Map: Pinnacle Agriculture Holdings Acquisitions In 2014
May 29, 2014
Pinnacle Agriculture Holdings continues to expand its agricultural retail distribution business through these key acquisitions in 2014. Read More

Trending Articles

Crop InputsPlatform Specialty Products To Acquire Arysta LifeScience
October 20, 2014
Once the acquisition is complete, Platform Specialty Products will combine Arysta LifeScience with previously acquired companies Agriphar and Chemtura Crop Solutions. Read More
Seed/BiotechMonsanto Offers New Support For Ferguson, Area Communities
October 8, 2014
Monsanto Co. has committed $1 million in new support for several collaborative efforts in Ferguson, MO, and surrounding communities in North St. Louis County. Read More
Seed/BiotechUnapproved Genetically Modified Wheat Found In Montana
October 3, 2014
USDA reports that one year after discovery of Monsanto's unapproved wheat in a single Oregon field disrupted U.S. wheat export sales, the GMO wheat has again been found in Montana. Read More
Equipment2014 Product Of The Year Voting
September 19, 2014
The deadline to vote for the 2014 CropLife IRON Product of the Year is October 31. Please cast your vote today to help us determine the winner. Read More
FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More
CropLife 100CHS To Build $3 Billion Fertilizer Plant In North Dakota
September 5, 2014
The fertilizer plant in Spiritwood will be the single largest investment in CHS history, as well as the single largest private investment project ever undertaken in North Dakota. Read More

Latest News

CropLife 100GROWMARK Announces Appointments In Plant Food Division
October 22, 2014
GROWMARK, Inc. has announced the three key staff changes in its Plant Food Division. Read More
CropLife 100GROWMARK Appoints New VP Of Finance And Risk Management
October 22, 2014
Wade Mittelstadt has been named GROWMARK Vice President, Financial and Risk Mangement, effective December 1, 2014. Read More
FungicidesEPA Approves BASF In-Furrow Corn Fungicide
October 22, 2014
Field trials show Xanthion In-furrow fungicide provides more rapid emergence, extended residual control and improved seedling health than untreated crops. Read More
EquipmentAgraScout App Available At No Cost To Universities
October 21, 2014
AgraScout, a fast and easy to use mobile crop scouting app, is now available at no cost to University students, Read More
LegislationNew Farm Bill Program To Provide Relief To Farmers Affe…
October 21, 2014
The USDA has implemented a new Farm Bill initiative that will provide relief to farmers affected by severe weather, including drought. Read More
ManagementGreenfield Scholars Program Aims To Sustain Agronomy Wo…
October 21, 2014
The program encourages talented students to study agronomy, crop and soil sciences while cultivating networks to develop the necessary workforce to sustain the profession. Read More
Paul SchrimpfPrecision Ag: Taking It To The Hill
October 21, 2014
A new coalition took the good news message of precision agriculture to Washington, DC, last month. Read More
ManagementUSDA Awards $18 Million In Small Business Research Gran…
October 21, 2014
The grants will provide high quality, advanced research and development that will lead to technological innovations and solutions for American agriculture. Read More
FertilizerCF Industries Terminates Merger Discussions With Yara I…
October 21, 2014
CF Industries Holdings and Yara International have terminated their discussions regarding a potential merger of equals transaction. Read More
Seed/BiotechSyngenta Ranked A Top 10 Biotech Employer For Third tim…
October 20, 2014
Syngenta ranked in the top 10 among the world’s top biotech employers, according to an annual survey conducted by Science magazine. Read More
CropLife 100Wheat Growers Break Ground For New Facility At Kennebec
October 20, 2014
Wheat Growers has broke ground for a state-of-the-art shuttle loader grain handling, fertilizer and agronomy facility in Kennebec, SD. Read More
FertilizerVerdesian Life Sciences Signs Agreement With Los Alamos…
October 20, 2014
Verdesian Life Sciences has signed a licensing agreement with Los Alamos National Laboratory to develop and market LANL’s latest nitrogen enhancement technology for plants. Read More
MicronutrientsStoller Group Announces Groundbreaking At New Office Bu…
October 20, 2014
Jerry Stoller, founder and president of Stoller Group, announced the groundbreaking at the site of the company’s future headquarters in Read More
Crop InputsBioSafe Systems Opens New Production Facility In Nevada
October 20, 2014
BioSafe Systems has completed construction of a state-of-art production facility in Sparks, NV, for its line of activated peroxygen products. Read More
Crop InputsPlatform Specialty Products To Acquire Arysta LifeScien…
October 20, 2014
Once the acquisition is complete, Platform Specialty Products will combine Arysta LifeScience with previously acquired companies Agriphar and Chemtura Crop Solutions. Read More
Seed/BiotechEPA Approves Dow’s Enlist Duo Herbicide
October 15, 2014
The Enlist Weed Control System, breakthrough technology to fight resistant and tough weeds, has received the long-awaited green light from federal regulatory authorities. Read More
MicronutrientsGypsum On Farms Could Help Keep Water Clean, Not Green
October 14, 2014
Gypsum, which has roots in the past as a farm soil treatment, also may have a bright future, and not just as a booster of crops but also as a protector of water. Read More
Photo credit: The United Soybean Board/The Soybean Checkoff.
Crop InputsVerdesian Grows Sales Staff
October 14, 2014
The new account managers will drive sales growth and support relationships with key customers in the plant nutrition and seed treatment and inoculants product categories. Read More