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
EquipmentTop 30 IRON WORKS Cartoons Of All Time
April 29, 2015
When CropLife IRON first started publishing more than a decade ago, long-time Publisher Al Strohmaier decided to start a cartoon Read More
EquipmentMeeting Changing Liquid Storage Needs
October 10, 2014
Tank and containment choices are expanding with shifts in farming practices and the economy. Read More
Precision AgGoogle Glass: New Tool For Ag
October 8, 2014
New wearable smart technologies such as Google Glass show potential to greatly impact how we accomplish the business of feeding the world. Read More
Equipment2014 Product Of The Year Voting
September 19, 2014
The deadline to vote for the 2014 CropLife IRON Product of the Year is October 31. Please cast your vote today to help us determine the winner. Read More
Top 100 Articles
CropLife 100The Andersons Acquires South Dakota Plant Nutrient Manufacturer Kay-Flo
May 20, 2015
The Andersons, Inc., ranked No. 22 on the CropLife 100, has purchased Kay Flo Industries of North Sioux City, SD. “This Read More
CropLife 100North Central Farmers Elevator, Wheat Growers Unification Approved By Board, Still Awaits Member Approval
May 13, 2015
The Boards of Directors for North Central Farmers Elevator (NCFE) and Wheat Growers (WG) have voted to approve the Unification Read More
CropLife 100AgGateway’s Barcoding Initiative Progressing Nicely
May 8, 2015
According to legend (or Wikipedia), the first step towards modern bar codes came back in 1948, when Bernard Silver, a Read More
CropLife 100Pinnacle Agriculture Acquires Minnesota Retailer
April 14, 2015
Pinnacle Agriculture Holdings, LLC, ranked No. 6 on the CropLife 100,  has successfully acquired Liebl Ag, LLC in Ada, MN.  Read More
CropLife 100CHS, Aurora Cooperative Complete Fertilizer Storage, Grain Shuttle Loading Facility
April 13, 2015
CHS Inc., the nation’s leading cooperative and ranked No. 5 on the CropLife 100, and Aurora Cooperative (ranked No. 21) Read More
CropLife 100GROWMARK Acquires Missouri Refined Fuels Terminal
April 2, 2015
Bloomington, IL-based GROWMARK and Magellan Pipeline Co. have entered into an agreement in which GROWMARK will acquire the refined fuels Read More
Latest News
Waterhemp in soybean stubble
HerbicidesEPA Signs Off On Monsanto’s Warrant Ultra Premix
May 27, 2015
Soybean and cotton growers looking for new tools to manage weeds will have a new, first-of-its-kind option in 2016 with Read More
Palmer pigweed seedhead in cotton
HerbicidesSTUDY: Weed Diversity Primarily Influenced By Geography
May 27, 2015
The potential long-term impacts of glyphosate-resistant crops on biodiversity of the agricultural landscape have been the subject of controversy. A Read More
Seed/BiotechAgrilead Forms Distribution Alliance With Kansas-Based …
May 27, 2015
Agrilead, Inc. announces the formation of a strategic alliance with KALO, Inc. of Overland Park, KS. Through the alliance, KALO Read More
EquipmentPrecision Tank Announces A&B Welding Acquisition
May 27, 2015
Precision Tank, a specialized tank and equipment manufacturer, announced today the acquisition of A&B Welding of Thompson, IA, a manufacturer Read More
Allied Cooperative Grain Plant
ManagementTraining Program Gives First Responders Skills For Grai…
May 27, 2015
When stored grain forms hard bridges, columns and other irregularities, those working to correct it find themselves at risk of Read More
Industry NewsBASF Sponsors Space Farming Research Project
May 26, 2015
Is it possible to produce large quantities of high quality vegetables on a space station, about 320 kilometers away from Read More
FertilizerTexas Ammonium Nitrate Bill Passes Senate, Heads To Gov…
May 26, 2015
The Texas State Senate gave final approval last Thursday to new regulations for ammonium nitrate, reports The Dallas Morning News Read More
Young corn plants
Industry NewsArysta Europe Details New Organizational Structure
May 26, 2015
Arysta LifeScience Europe recently announced a new organizational structure to leverage its scale and accelerate the company’s growth in this Read More
Syngenta Sign
Eric SfiligojMonsanto-Syngenta Could Hinge On A Judgment Of Solomon …
May 26, 2015
In the bible, the reputation of King Solomon’s wisdom in matters of despite comes from a tale of one child Read More
ManagementA New Sprayer Company & UAV Research In The Spotlig…
May 21, 2015
CropLife’s Paul Schrimpf and Eric Sfiligoj talk about a Dutch sprayer manufacturer entering the U.S. with a super-sized entry and Read More
HerbicidesFirst U.S. Sale Of Enlist Duo Herbicide Made By Dow Agr…
May 21, 2015
Dow AgroSciences has recorded the first U.S. sale of Enlist Duo herbicide with Colex-D Technology. This marks the first commercial Read More
CropLife 100The Andersons Acquires South Dakota Plant Nutrient Manu…
May 20, 2015
The Andersons, Inc., ranked No. 22 on the CropLife 100, has purchased Kay Flo Industries of North Sioux City, SD. “This Read More
EquipmentNORAC Options Coming To TerraGator
May 19, 2015
Utilizing NORAC’s Standard Control technology, boom height control is now available for TerraGators with Airmax Precision 2 and Benson Booms. This Read More
Crop InputsHelena Introduces New Soil Health Product
May 19, 2015
Helena Chemical Co. is helping agricultural producers maximize yields and efficiency with the introduction of Liquid Chisel, a new product Read More
Stewardship4R Nutrient Management Planning Certification Now Avail…
May 19, 2015
The American Society of Agronomy (ASA) and the International Certified Crop Adviser (ICCA) program announce a new specialty certification in Read More
Environmental Defense Fund logo
Paul SchrimpfEnvironmental Defense Fund: Appreciating Partners
May 19, 2015
I WAS deep in the throes of preparation for the Commodity Classic meeting that took place this past February, trying Read More
WebinarsUpcoming Webinars
May 19, 2015
Register for one of our upcoming Webinars or access our archive of past Webinars to view recordings of presentations that may be of interest to you. Read More
Syngenta Sign
Seed/BiotechSyngenta Responds To Lawyer’s Victory Claim In Vi…
May 18, 2015
A plaintiff’s lawyer has issued a public statement claiming that damages have been awarded in the Agrisure Viptera corn lawsuits Read More