Will 2013 Be An Unlucky Year For Ag Retail?

Another new year is upon us. Now that we know the world didn’t end in December (as the Mayans predicted), we can all give thanks and look forward to another wonderful year for agriculture in 2013. In truth, many of the factors that have driven the marketplace to new heights during the 2000s remain in place — high commodity prices, an increasing global population looking for food, fuel, feed and fiber and a grower-customer set seeking to improve their operations by investing money in equipment, services or both.

On the surface, it appears that the ag industry is poised for another banner year in 2013, joining an unbroken string of ones that have occurred since the 2010s began. (And you can read more about these predictions from various industry experts in this issue.) Still, I would be lying to you if I said I was completely comfortable with such a rosy outlook for 2013. And there are two very important reasons why I think 2013 could be a bit unlucky for the marketplace.

The first is the weather. Everyone knows that better than half the Continental U.S. was gripped by a very severe drought during 2012, which ultimately shaved 10 million acres from the anticipated corn harvest when all was said and done. For the most part, grower-customers and ag retailers came through this dry spell without feeling much financial heat (largely due to crop insurance).

But the fear now among industry watchers is that 2013 will bring more of the same dry weather across much of the U.S. Early forecast models by the federal government seem to predict that 2013 has a better than 50% chance of being another year of “insufficient rainfall,” particularly in the Mid-South and Upper Midwest.

If this happens, there are many ag retailers who believe their grower-customers will not be able to survive, even with the cushion of crop insurance. “My guys can take an one-year hit losing their crops, but not two,” said one retailer at a recent industry event.

My second concern is consolidation among ag retailers. In late 2012, newly-formed Pinnacle Ag, with significant financial backing, purchased both CropLife 100 retailers Jimmy Sanders and G&H Seed in its bid to become “a top five retailer by 2017.” Meanwhile, other big players in the market such as Crop Production Services, J.R. Simplot and Wilbur-Ellis are making their own acquisitions as well. And more are certain to follow as these big players look to strengthen their market positions/penetration.

Now I’ve seen this kind of “consolidation wave” sweep over other industries I’ve covered before. As bigger companies swallow up littler ones, there is plenty of industry wealth changing hands, but overall market growth tends to stall as everything shakes out.

Minus these two factors, I would agree that everything looks just fine for ag in 2013, with plenty of positive growth and money to go around. At this point, only time will tell how lucky, or unlucky, 2013 ends up being.

Leave a Reply

2 comments on “Will 2013 Be An Unlucky Year For Ag Retail?

  1. I believe the biggest fear in 13 is the weather. Will the drought expand or shrink is the million dollar question that everyone has a opinion and no one has a answer.

  2. If you look at farm income in 2012 it spiked upward because yields droppped by 15% and prices spiked 50%. Many farmers made more money on their crop before insurance than they did in 2011. With revenue protection insurance the windfall was even greater. Cheaper crop insurance will only give farmers more reasons to purchase protection. Who's going to go out of business with record income? Retailers are the ones who will feel the pain here.

Eric Sfiligoj Stories

Eric SfiligojHope for Application Equipment Sales
April 24, 2017
The old saying goes that a “rising tide lifts all boats.” If this is indeed the case, then things may Read More
Farming drone air
Eric SfiligojThe Interest in UAVs for Agriculture Grows
April 10, 2017
At times, it seems as if experts have been predicting “big things” for unmanned aerial vehicles (UAVs) for several years Read More
Crop Protection Products in storage
Eric SfiligojThe Crop Protection Picture in 2017: Familiar Products, New Owners
April 3, 2017
Some events take time to come to pass. For instance, I remember when I first started covering the ag retail Read More
Comodity Classic 2017 overview
Eric SfiligojConsidering Customer Concerns
April 1, 2017
One of the primary goals for any business to survive and thrive is to know what its customers want and Read More
Trending Articles
Crop InputsFlying Under the Radar No More, FMC Goes Big
April 13, 2017
Describing FMC as “under the radar,” admittedly, is probably a stretch. But in a snap of the fingers, FMC upped Read More
Young Corn Plants
Crop NutritionStill Hunting Yields
April 1, 2017
There’s no denying it — the agricultural marketplace today is undergoing a fundamental shift in fortunes. Not too many years Read More
Nutrients for Life Foundation Teacher
FertilizerNutrients For Life Foundation Celebrates 10 Years Teaching Fertilizer Education
March 23, 2017
Those in agriculture know fertilizer is a vital ingredient to grow strong, productive crops. In fact, fertilizer is responsible for Read More
AdjuvantsA New Weed-Control Era Begins: But First, One Last Obstacle
March 4, 2017
There is trepidation, there is reluctance, and there is excitement. Ag retailers feel it all about the new dicamba and Read More
LIFT Academy video screenshot
Crop InputsLIFT Agriculture Academy: A Q&A With West Central Distribution’s Dean Hendrickson
March 1, 2017
West Central Distribution recently launched its LIFT Agriculture Academy, a new, premiere training and professional development resource for West Central’s ag Read More
Farmer and aptop
Matt Hopkins10 Warning Signs Your Website Is Grossly Outdated
February 8, 2017
Your Website is often a visitor’s first impression of your ag retail business. A positive first impression can set the Read More
Latest News
AGCO Ratliff featured
EquipmentAGCO Mourns Passing of Company Founder, Industry Vision…
April 25, 2017
AGCO Corp., a worldwide manufacturer and distributor of agricultural equipment and solutions, mourns the passing of founder and former President, Read More
Engenia soybeans
Crop InputsINNVICTIS CROP CARE Introduces VANDAL MOC Soybean Herbi…
April 25, 2017
INNVICTIS CROP CARE, LLC has announced the U.S. EPA registration for VANDAL MOC, a combination of sulfentrazone plus metolachlor. VANDAL Read More
Kochia
HerbicidesINNVICTIS CROP CARE Launches STAVE Post-Emerge Broadlea…
April 25, 2017
INNVICTIS CROP CARE, LLC has introduced STAVE as the newest addition to­ its expanding portfolio. STAVE will be a great Read More
Sonny Perdue
LegislationSonny Perdue Confirmed by Senate as Next Agriculture Se…
April 25, 2017
After months without a secretary of agriculture, the Senate voted Monday evening to confirm former Georgia Gov. Sonny Perdue to Read More
BPIA logo
Seed/BiotechBPIA Files Comments with USDA
April 24, 2017
The Biological Products Industry Alliance (BPIA) has filed comments with the USDA’s Animal and Plant Health Inspection Service (APHIS) Plant Read More
Eric SfiligojHope for Application Equipment Sales
April 24, 2017
The old saying goes that a “rising tide lifts all boats.” If this is indeed the case, then things may Read More
Stewardship video screenshot
ManagementNew Video Raises Awareness of 2,4-D Stewardship
April 24, 2017
A new public service video developed and produced by the 2,4-D Research Task Force, in conjunction with the American Soybean Read More
ManagementAn Inside Look at Award Winning Ag Retailer Gar Tooteli…
April 20, 2017
CropLife Editor Eric Sfiligoj discusses An Inside Look at Award Winning Ag Retailer Gar Tootelian Read More
Students Soybean Field
Industry NewsMACA Announces 2017 Young Leader Scholarship Recipients
April 19, 2017
The Mid America CropLife Association (MACA) Board of Directors selected 11 college students to receive the MACA Young Leader Scholarship Read More
Growmark FS Outlet
SoftwareKnoa Software Solution Helps GROWMARK Boost System Perf…
April 19, 2017
Knoa Software, a leading provider of user experience management (UEM) software, has announced that GROWMARK, Inc., a regional agricultural cooperative Read More
Crop InputsFBN Publishes ‘Voice of the Farmer’ Agricul…
April 17, 2017
Farmer’s Business Network (FBN) released today its “The Voice of the Farmer”, which the company is describing as “a special Read More
ManagementTalking Responsible Ag
April 13, 2017
CropLife Editor Eric Sfiligoj discusses the Responsible Ag program with director Bill Qualls. Read More
Crop InputsFlying Under the Radar No More, FMC Goes Big
April 13, 2017
Describing FMC as “under the radar,” admittedly, is probably a stretch. But in a snap of the fingers, FMC upped Read More
Crop InputsWhat do Roundup and Mickey Mouse Have in Common? Califo…
April 13, 2017
(SOURCE: East Valley Times) Glyphosate, the active ingredient in Monsanto Co.’s Roundup and many other weed killers, is being added Read More
Syngenta headquarters in Basel, Switzerland
Crop InputsSource: ChemChina to Divest Assets to Adama Following S…
April 11, 2017
China National Chemical Corp. plans to redistribute agrochemical assets to its Adama unit after the $43 billion takeover of Syngenta Read More
Farming drone air
Eric SfiligojThe Interest in UAVs for Agriculture Grows
April 10, 2017
At times, it seems as if experts have been predicting “big things” for unmanned aerial vehicles (UAVs) for several years Read More
OpinionOpinion: Taking On The Farmers Business Network
April 8, 2017
Well, another round of venture capital funding has come to Farmers Business Network (FBN), followed up with the obligatory feature Read More
Drone
EquipmentFarming Drones: The Future Of Agriculture?
April 7, 2017
Chances are, you already know drones are amazing. After all, this is something DroneLife readers just understand. But if you’re Read More