Usually as the calendar turns to spring, there is a decided uptick in news about weather conditions, pest and weed projections and the overall outlook for the upcoming planting season. Normally, things such as consolidation and company acquisitions disappear (or at least slow down) until the summer rolls around.
But not this year. Although it’s only the first week of April, the news of ag retail location acquisitions and mergers has been flying fast and furious across the Internet. As has been the case for the past year or so, mega-retailers such as Wilbur-Ellis and CHS are leading the charge, acquiring significantly smaller outfits to fill in gaps in their retail outlet networks. Perhaps busiest of all has been Pinnacle (think Jimmy Sanders), which has seemingly purchased a few new retailers each week during the month of March.
What’s behind this flurry of activity in consolidating so early in the year? It’s hard to say at this point. Some analysts would probably point to some smaller retailers “cashing out” their businesses following a good five-year run of record profits. Others would probably look to some market changes coming at the end of June (such as the ethanol mandate reductions), which are convincing some ag retail owners now is the time to leave the industry.
No matter what the reason, it will be interesting to see just how far this ag retail consolidation trend goes throughout 2014. It’s been a few years since mergers and acquisitions headlined our magazine’s annual CropLife 100 report.
But based upon the early returns, that could change this year!