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 100Pinnacle Purchases California-Based Specialty Crops Retailer
July 20, 2015
Pinnacle Agriculture Holdings has successfully acquired California-based NH3 Service Co.  Operating as part of Pinnacle’s Performance Agriculture brand, the new locations Read More
Asmus Farm Supply liquid fertilizer facility features 20,000 square feet
CropLife 100Slideshow: Asmus Farm Supply Shows Off Its New Liquid Fertilizer Facility
July 15, 2015
Asmus Farm Supply, Rake, IA, recently added a new liquid fertilizer facility to its company operations. The new liquid fertilizer Read More
CropLife 100Wilbur-Ellis Feed Division Facilities Receive Safe Feed/Safe Food Certification
July 13, 2015
Wilbur-Ellis Co.’s Feed Division, a marketer and distributor of value-added feed ingredients for the aquaculture, livestock and pet food industries Read More
CropLife 100BRANDT Expands To Brazil With Acquisition
July 8, 2015
BRANDT has acquired a majority interest in Target Brasil Fertilizantes Ltda. through its Brazilian subsidiary. Target Brasil manufactures, distributes and Read More
Top 100 Articles
CropLife 100Pinnacle Purchases California-Based Specialty Crops Retailer
July 20, 2015
Pinnacle Agriculture Holdings has successfully acquired California-based NH3 Service Co.  Operating as part of Pinnacle’s Performance Agriculture brand, the new locations Read More
Asmus Farm Supply liquid fertilizer facility features 20,000 square feet
CropLife 100Slideshow: Asmus Farm Supply Shows Off Its New Liquid Fertilizer Facility
July 15, 2015
Asmus Farm Supply, Rake, IA, recently added a new liquid fertilizer facility to its company operations. The new liquid fertilizer Read More
CropLife 100Wilbur-Ellis Feed Division Facilities Receive Safe Feed/Safe Food Certification
July 13, 2015
Wilbur-Ellis Co.’s Feed Division, a marketer and distributor of value-added feed ingredients for the aquaculture, livestock and pet food industries Read More
CropLife 100BRANDT Expands To Brazil With Acquisition
July 8, 2015
BRANDT has acquired a majority interest in Target Brasil Fertilizantes Ltda. through its Brazilian subsidiary. Target Brasil manufactures, distributes and Read More
Milan Kucerak, president/CEO, West Central
CropLife 100West Central Cooperative And Its New President Are A Match Made In Deviation
June 29, 2015
To appreciate just how unique West Central Cooperative is in the world of ag retail, an observer need only consider Read More
Winter Wheat
CropLife 100South Dakota Co-op Member Owners Vote No On Unification
June 26, 2015
The Boards of Directors for North Central Farmers Elevator (NCFE) and Wheat Growers (WG) have announced that member-owners have voted Read More
Latest News
FFA at Monsanto Booth at the 2015 National Farm Machinery Show
Industry NewsFive Students Receive The 2015 Monty’s Plant Food Compa…
July 29, 2015
This fall, five college-bound students will have financial support through the Monty’s Plant Food Company FFA Scholarship. All five scholarship Read More
Crop InputsBeneficial Reuse Management Launches Pelletized Gypsum …
July 29, 2015
Beneficial Reuse Management (BRM) announced this week at Ag Media Summit that its GYPSOIL Pelletized Products Division will open a Read More
StewardshipOhio Water Quality Project To Determine How Much Phosph…
July 27, 2015
Researchers with the College of Food, Agricultural, and Environmental Sciences at The Ohio State University are looking for farmers in Read More
FertilizerKoch Agronomic Services Launches N-TEGRATION Technology
July 27, 2015
Koch Agronomic Services, LLC (KAS) has launched  N-TEGRATION Technology, a process technology platform designed to enable production of enhanced efficiency fertilizers at Read More
HerbicidesExpert: IARC Herbicide Classifications Leading To Confu…
July 24, 2015
Few people in the crop protection industry had heard of the International Agency for Research on Cancer (IARC) before this Read More
ManagementFCI Trade Summit Update & Precision Tank Turns 50
July 23, 2015
Editors Dave Frabotta and Eric Sfiligoj discuss the upcoming FCI Trade Summit in Las Vegas, NV, and how Precision Tank Read More
Palmer pigweed seedhead in cotton
HerbicidesUSDA Deregulates Dow AgroSciences’ Enlist Cotton Trait
July 23, 2015
The USDA today issued its decision deregulating Dow AgroSciences’ Enlist cotton trait in the U.S. The USDA has now completed its Read More
Industry NewsVerdesian Life Sciences Showcases Versatile Product Por…
July 23, 2015
Technology has revolutionized agriculture by bringing farmers, retailers and distributors to the forefront of the digital age. To meet the Read More
FertilizerWSJ: Cf Industries Exploring Merger With Dutch Chemical…
July 23, 2015
U.S. fertilizer maker CF Industries is in advanced merger talks with Amsterdam-listed chemical company OCI NV, the Wall Street Journal Read More
HerbicidesNufarm Releases New Panther SC Herbicide
July 23, 2015
Nufarm has announced the availability of new Panther SC herbicide. Panther SC is the first liquid formulation of flumioxazin available Read More
EquipmentFarmLink Launches Farm Equipment Sharing Program
July 23, 2015
FarmLink has introduced a new online farm equipment sharing community – MachineryLink Sharing – leveraging this new economy business model Read More
HerbicidesCould The South’s Most Troublesome Weed Represent A Thr…
July 22, 2015
Palmer amaranth is undoubtedly the most troublesome weed in the southern United States, taking a devastating toll on both cotton Read More
Industry NewsH.J. Baker Hires New Director Of International Sales
July 22, 2015
Global Agriculture firm H.J. Baker announced today that Steve Langley has joined the company’s Crop Performance Division and Animal Health Read More
InsecticidesSyngenta Recommends Soybean Scouting To Prevent Economi…
July 22, 2015
Proper soybean insect pest control begins with scouting. As the warm weather continues, Syngenta encourages growers to implement a scouting Read More
Crop InputsH.J. Baker Launches Fall Sulphur Campaign
July 22, 2015
H.J. Baker has launched their “Keep Your Future Green – Use Tiger This Fall and Win Big” campaign. The campaign Read More
Central Valley Ag Randolph, NE
Retail FacilitiesStueve Construction Builds Fifth Facility For Central V…
July 21, 2015
Central Valley Ag partnered with Stueve Construction Co. to successfully design and build its Monroe, Oakland, Wakefield and Royal hub facilities Read More
FertilizerNew Research Could Lead To Less Reliance On Nitrogen, E…
July 21, 2015
Farmers often are required to apply nitrogen fertilizers to their crops to maintain quality and improve yields. Worldwide, farmers used Read More
Seed/BiotechMonsanto Targets Farmers, AFBF In Syngenta Takeover
July 21, 2015
As Monsanto Co. struggles to convince rival Syngenta AG to discuss a potential merger, the seed and agrochemical giant is Read More