Industry Consolidation On The Rise
The past few years, putting together our magazine’s annual ranking of the nation’s top ag retailers has been fairly easy. As agriculture enjoyed some of its best financial years ever, ag retailers for the most part stood pat with their businesses and simply made money. With only a handful of exceptions, the top 100 dealerships and cooperatives largely stayed the same from one year to the next.
But this trend of inactivity appears to be coming to an end. Late last year, Pinnacle Holdings – an investment group led by former United Agri Products personnel – acquired a stake in long-time CropLife 100 member Jimmy Sanders. Since that time, dozens of e-mails have hit my in-box detailing ag retailer acquisitions. This past month, at least one consolidation announcement per week was being released. Furthermore, not only is Pinnacle remaining active through its Jimmy Sanders connection, but other big names such as Crop Production Services, CHS and Wilbur-Ellis have gotten into the consolidation mix as well.
Looking at the rest of 2013, I expect ag retailer consolidation to stay at a rapid clip. As I stated earlier in this column, the marketplace has made as much money in the past few years as it had during the prior 10 or so. Therefore, ag retailers are at a peak in value. In addition, many large ag retailers, flush with cash, are looking for ways to expand their territories, add personnel and “keep pace” with their market rivals.
So I betting once I send out the 2013 CropLife 100 survey forms later this summer, I have some entirely new company names appearing on the final list. And for those companies at the top in terms of sales and numbers of facilities, I expect many of these numbers to break their previous records.