The Human Price Of Ag Retailer Consolidation

As I write this column, we are putting the finishing touches on our annual CropLife 100 issue. Even with a lingering drought and lost crops, the nation’s ag retailers had a record-setting revenue year in 2012 – a trend that has continued for the past three years without fail. Better still, most ag retailers are bringing in enough money to maintain their independence instead of being convinced to merge their operations with some of the larger members of the CropLife 100. Indeed, only three companies disappeared from this year’s list through consolidation. Prior to 2010, an average of seven retailers left our CropLife 100 rankings via the consolidation route.

But if I were a betting man, I would think the pace of consolidation will pick back up with a vengeance as we head into 2013. After three straight record revenue years, many ag retailers are worth as much today as they have ever been – or are likely to ever be worth. Many of these are family-owned and cashing out might be a viable option if no new family members are interested in inheriting these companies. And according to many market watchers, investors from Wall Street have taken notice of agriculture’s recent hot streak and are in the midst of buying up farmland and ag retailers.

Unfortunately, the downside to all this consolidating is that many great people – long-time trusted advisors to growers and fine friends of our magazine staff – will likely be leaving the marketplace for good. I’ve seen this pattern before, when I covered the soft drink bottling industry back during the 1990s. Today, most of my industry friends from those days have sold out and/or retired based upon the news reports I’ve seen in the interim. It’s sad to think this same thing will happen in the ag retail market over the next decade.

But it undoubtedly will.

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