Welcome 2015!

With 2014 now a mere speck in the industry’s rearview mirror, it’s time to look ahead to agriculture’s prospects in the new year.

If anyone dares to, that is.

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From the early look of it, 2015 promises to be a year of supreme challenges for the agricultural community. It appears as if the days of $7 per bushel corn and $14+ per bushel soybeans are not coming back anytime soon and ag retailers and their grower-customers will have to adjust accordingly. In fact, based upon fertilizer application work in the fall (of the lack thereof), 2015 was already going to witness some pullback in dry fertilizer sales, particularly for potash and phosphates. But this situation likely will be made all the worse if 2015 planting intentions hold firm.

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In late November, USDA released its figures on the projected crop mix for 2015. Right now, growers plan to plant 91 million acres of corn this year, down 5 million acres from 2014. Meanwhile, soybean acres should increase 2 million acres to 86 million. Of course, this mix is being motivated by crop prices – and less corn will mean less fertilizer usage.

Also expected to negatively impact fertilizer usage in 2015 is water considerations. Growers in Ohio are already dealing with the fallout from this past summer’s algae bloom in Lake Erie near the city of Toledo, which prohibited water use by several hundred thousand consumers for a few days. New regulations for applying fertilizer are now in place in Ohio as a result, and other states are expected to follow this example during 2015.

Finally, this pullback in crop input revenue is likely to increase the frequency of consolidation among ag retailers. As most everyone has made money since the start of the 2010s, incident to sell their retail operations as waned. This is no longer the case, however. As one industry analyst commented during one of the fall 2014 industry events: “This next wave of retailer consolidation will make the ones we’ve previously seen seem like a light warm-up.”

What do you think will be the biggest ag story for the early part of 2015?

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So welcome 2015! Please, be kind.

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