Ag Retailers Seeing Fragments Of The Future
November 11, 2011 In the world of particle physics, researchers spend much of their time looking for a Grand Unified Theory. Without boring you with the finer details, this quest seeks to unify the various fragments of the cosmos, such as gravity and electromagnetism, into a single interaction model, providing scientists with an overall theory of everything.
In the world of agricultural journalism in which I live, I often undertake a similar task, trying to understand and speculate on where the general marketplace is headed by pulling information from sometimes fragmented sources. This includes industry trade shows and meetings, supplier events and one-on-one interviews throughout the year.
But even armed with this data, I find the most valuable “reads” on agricultural trends come from three sources — our magazine’s annual PACE Council meeting of industry leaders, the CropLife State of the Industry report and the CropLife 100 ag retailers survey. Taken together, these fragmented bits of industry knowledge usually paint a complete picture, not only of where the agricultural world is now but where it might be headed not too far down the road.
Except for this year. In 2011, based upon all the information I’ve been able to piece together from these three key sources, fragmentation may indeed be the way of the future.
Now, to be honest, this probably doesn’t come as a great shock to anyone doing business in agriculture today. Since time immemorial, retailers have noted that 80% of their revenue comes from 20% of their grower-customers. However, the fragmentation is beginning to run even a bit deeper than this.
At the PACE Council meeting, one participant noted that he knew of a larger grower who had virtually set up his own retail operation. “This farmer has all the things an ag retailer would have — fertilizer storage, crop protection products and his own sprayers,” said the council member. “He says he has no interest in selling these things to any other growers, but he wants to make sure he has what he needs when he needs it without waiting.”
How will traditional ag retailers cater to this kind of customer? Probably only in fragments, by providing specialized products and services.
This fragmentation is also appearing in the crop protection market. Here, the use of fungicides as a preventive to boost yields is gaining in popularity. Likewise, the new and ever-expanding group of resistant or tolerant weeds are completely changing the way many growers and retailers approach control.
“I think this creates some opportunities for ag retailers because we will need to start using different products to try to control these,” says Wade Blowers, COO at Hamilton Farm Bureau. “This will make weed control more of a specialized art.”
So it appears agriculture won’t have an unified theory, but keep fragmenting in new and different directions. And, given the facts, that’s probably for the best for everyone involved.
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