Fall is in full swing. Here at CropLife, we are busily collecting data from our annual CropLife 100 ag retailers survey. Now in its 30th year, the CropLife 100 has become something of a badge of honor for those retailers that make the list. But it also provides an invaluable snapshot of what the state of agriculture is for the current year and gives a glimpse of what might be coming down the line in the year ahead.
Except for this year, that is. Since 2009, most of the information from the CropLife 100 survey the past three years has pointed to plenty of optimism when it comes to the overall state of the ag marketplace. And this has largely played out as expected, with community prices staying high and grower-customers spending plenty of capital on products and services.
But there are signs 2014 won’t be as rosy in terms of market trends as the previous three seasons. For one thing, the major market driver the past few years, fertilizer, looks as if it will have a rougher road in the coming year. More than half of the early CropLife 100 surveys predict growers will downsize their corn acreage in 2014 and turn to more soybeans instead, using less fertilizer in the process.
Despite this fact, more than 80% of these same ag retailers are planning to invest more money than they did in 2013 into expanding and upgrading their outlets. Furthermore, many respondents have noted this capital is being used specifically to expand fertilizer storage capabilities.
It’s a similar tale with the overall outlook for 2014. When asked how their grower-customers feel about their prospects for the coming year, more than 60% say this group is “somewhat pessimistic.” Yet, when asked to rate their own feelings for profitability in 2014, the majority of respondents rank the year as a seven on a scale of one to 10 – on par with the seven or eight the market has averaged the past few years on this same question.
As I said, these are some early returns, with about 33% more yet to come in. Still, based upon the initial data, 2014 could be a head-scratching year for agriculture.