The Right Equipment

At first glance, the custom application category is growing by leaps and bounds. Since the category dropped 14% in sales in 2004, it has been on an impressive winning streak. In the 2005 CropLife® 100 survey, custom application revenue jumped ahead 24% to $608 million. This year, sales were up an almost identical 23% at $747 million.

For the most part, retailers credited a reverse of the trend of grower-customers doing their own custom application work and the continued growth of precision agriculture for this gain. However, not everyone agreed.

“Our custom application grew, but most of this was post spraying and much of it in July,” says Jim Shelton, agronomy division manager for Landmark Service Cooperative, Cottage Grove, WI. “This helped income, but applicators lost even more of their summer enjoyment.”

The High Cost Of Fuel

Of course, this revenue picture for custom application would have been even brighter had retailers not given much of their profits back to fuel up their equipment. According to the data collected in the 2006 CropLife 100 survey, 99% of respondents thought that higher fuel prices were having a very negative or somewhat negative impact on their bottom lines. This was up significantly from the 2005 survey totals, where only 53% of respondents indicated higher fuel prices were very or somewhat negative.

“Energy prices, combined with increased equipment cost, continue to squeeze our bottom line,” says Shelton.

To make up this shortfall, many retailers have passed this added cost on to their grower-customers. According to the survey, 46% were charging more to recoup their higher fuels costs and another 23% have added a surcharge for fuel to their grower-customer bills.

Instead of charging more, some retailers are looking to join the biofuels movement themselves. According to 2006 CropLife 100 retailers, 18% are exploring the use of biodiesel in their equipment fleets and 3% are looking at ethanol. Another 31% are looking at both biofuel alternatives as an option to reduce their fuel expenses.

Ag-Chem On Top

In terms of what equipment CropLife 100 retailers are using in their custom application businesses, there is one manufacturer that stands out against the competition. When asked what brand name of equipment was being used by their operations, 81% of respondents listed Ag-Chem Equipment products as the primary members of their fleets. Providing even more market share pull for Ag-Chem’s parent, AGCO Corp., 33% of CropLife 100 retailers have Spra-Coupe equipment in their fleets and 2% use Willmar sprayers.

In virtually a tie for second place among custom application equipment brand names were Case IH at 54% and John Deere at 53%. Other manufacturers getting check marks in the 2006 CropLife 100 survey included GVM at 18%, Miller Application Equipment at 12%, Hagie Manufacturing Co. at 7%, and Equipment Technologies at 2%.

Moving into 2007, CropLife 100 retailers are confident the custom application category will continue to enjoy robust sales. According to several respondents, the expected push toward biofuels will translate into more business for their application operations. “Ethanol should increase corn acres, which will be good for us,” says Dennis Montavon, general manager for Effingham Equity, Effingham, IL.

Perhaps more telling of this level of confidence is the percentage of retailers that are planning to make additional equipment purchases during the 2007 growing season. According to the survey, 55% of CropLife 100 retailers plan to buy new equipment in the coming year. Another 6% are looking to fill fleet gaps with used equipment. Twenty-nine percent are considering buying both new and used equipment in 2007. Only 10% of respondents said they have no plans to buy equipment in the new year.

Leave a Reply

Equipment Stories

Precision AgPrecision Agriculture: Finding The Payback
September 6, 2014
Profitability in precision ag is not about any one technology, but the result of employing technology in a total system approach that is agronomically sound. Read More
MAGIE 2014 ShowStopper
EquipmentJohn Deere Again Wins MAGIE ShowStopper Award
August 25, 2014
For the second consecutive year, John Deere was honored at the Midwest AG Industries Exposition (MAGIE) for its new R4045 sprayer. Read More
EquipmentDeere Announces Factory Layoffs
August 18, 2014
Deere & Co. has announced it will reduce the size of its manufacturing workforce at some agricultural equipment factories in response to current market demand for its products. Read More
A finished Willmar 16-ton side-shooting tender.
TendersNew Production Facility Helps Willmar
July 17, 2014
In 1963, a group of businessmen started Willmar. Today, a half-century later, the company is one of the ag industry’s longest-running brands. Read More

Trending Articles

CropLife 100CHS To Build $3 Billion Fertilizer Plant In North Dakota
September 5, 2014
The fertilizer plant in Spiritwood will be the single largest investment in CHS history, as well as the single largest private investment project ever undertaken in North Dakota. Read More
EquipmentNew Holland Acquires Miller-St. Nazianz
September 3, 2014
The assets of Miller acquired as part of the transaction will become part of New Holland Agriculture, a CNH Industrial brand, building on a successful four-year partnership between the two companies. Read More
CropLife 100Pinnacle Acquires East Kansas Chemical
September 2, 2014
Ranked 82nd on the CropLife 100, East Kansas Chemical will operate as part of Pinnacle's Performance Agriculture brand. Read More
MAGIE 2014 ShowStopper
EquipmentJohn Deere Again Wins MAGIE ShowStopper Award
August 25, 2014
For the second consecutive year, John Deere was honored at the Midwest AG Industries Exposition (MAGIE) for its new R4045 sprayer. Read More
ManagementExpert To Discuss Farmland Value, Rent At Farm Science Review
August 18, 2014
While cropland values in Ohio increased in the past two years, they have remained flat in 2014, declining in some cases, according to an Ohio State University agricultural economist. Read More
EquipmentAdvance Your Technology IQ At MAGIE
August 13, 2014
The Midwest AG Industries Exposition (August 20-21) is the place you need to be to see, study and evaluate how new advances in the equipment, operations, crop protection and fertility sectors can help your business prosper. Read More

Latest News

CropLife 100Pinnacle Acquires Kansas-Based Cedar Ridge Supply
September 16, 2014
Cedar Ridge Supply will operate as part of Pinnacle's Performance Agriculture brand. Read More
StewardshipSecretary Vilsack Highlights Innovative Conservation Ef…
September 15, 2014
Nearly $16 million in Conservation Innovation Grants (CIGs) will be awarded to 47 organizations to help develop cutting-edge ideas to accelerate innovation in private lands conservation. Read More
Seed/BiotechSyngenta Responds To Cargill Lawsuit
September 15, 2014
Syngenta believes that the lawsuit is without merit and strongly upholds the right of growers to have access to approved new technologies. Read More
Equipment2014 Farm Science Review Launches Mobile App
September 15, 2014
Smartphone and tablet users planning on attending the 2014 Farm Science Review can now download this year’s customized mobile application. Read More
CropLife 100Southern States Coop Grower Sets Georgia Soybean Yield …
September 15, 2014
Georgia farmer Randy Dowdy's soybeans yielded an astonishing 110.66 bushels per acre, crushing the previous record of 82 bushels-per-acre. Read More
NIMITZ Treated vs Untreated pepper plant
InsecticidesNIMITZ Nematicide Approved By EPA
September 12, 2014
NIMITZ is a novel, non-fumigant nematicide with simplified application features, user safety and an active ingredient with a unique mode of action. Read More
InsecticidesMarrone Bio Innovations Receives Patent For Chromobacte…
September 11, 2014
The patent is the first step for MBI in developing a commercially viable product to inhibit infestations of corn rootworm larvae across America and other regions. Read More
HerbicidesDow AgroSciences: Keeping The Pipeline Stocked
September 11, 2014
Dow AgroSciences is embracing product diversity to drive the company’s future. Read More
CropLife 100CHS Is Official Partner Of New St. Paul Ballpark
September 10, 2014
The new ballpark in St. Paul, MN, officially became CHS Field with Twin Cities-based CHS Inc. revealed as the naming rights partner. Read More
EquipmentHagie Honors Farming Stewardship Leaders
September 10, 2014
The Iowa Farm Environmental Leader award recognizes Iowa farmers as environmental leaders that are committed to healthy soils and improved water quality. Read More
Precision AgPlantBeat: Your Plants’ Pulse In The Palm Of Your Han…
September 10, 2014
A new agronomic monitoring and recommendation service from Phytech could rewrite the book on real-time plant health status monitoring. Read More
StewardshipCCAs Making Headway With 4R Program In Lake Erie Wester…
September 9, 2014
Certified Crop Advisers are implementing the 4R Nutrient Stewardship Certification program in Lake Erie's Western Basin to improve water quality. Read More
MicronutrientsMicronutrients Going Macro
September 9, 2014
Between 2014’s fantastic growing conditions and a heightened awareness on plant nutrition, the major players in micronutrients are gearing up for another big year. Read More
Crop InputsFMC Announces Cheminova Takeover
September 8, 2014
FMC Corporation today announced that it has signed a definitive agreement to acquire Cheminova, a wholly owned subsidiary of Auriga Industries. Read More
HerbicidesValent’s Fierce XLT Herbicide Receives EPA Approv…
September 8, 2014
Valent U.S.A. Corp. announced today that Fierce XLT Soybean Herbicide is now federally registered for preemergence weed control in soybeans Read More
Eric SfiligojIndustry Consolidation Set To Increase Going Forward
September 8, 2014
As the agricultural marketplace moves into fall, one observer predicts the pace of consolidation will grow at all levels. Read More
LegislationCropLife America Leaders Address Regulatory Landscape, …
September 8, 2014
As CropLife America enters its 81st year, the organization’s leaders have seen another period of rapid and visible policy and public issue activity. Read More
FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More