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

PrecisionAg Vision Conference
Precision AgPrecisionAg® Vision Conference: Focused on the Future
June 13, 2017
PrecisionAg® is pleased to announce the return of its PrecisionAg Vision Conference, October 10-12, 2017. Based on overwhelmingly positive response Read More
EquipmentAgTech Summit Aiming High for Modern Farming Solutions
June 12, 2017
THRIVE AgTech, in partnership with SVG Partners and Forbes, is hosting the third annual Forbes AgTech Summit June 28-29 in Read More
Central Valley Ag Randolph, NE
Precision AgLand O’Lakes Invests in EFC Systems
June 12, 2017
Land O’Lakes, Inc. has made a minority equity investment in EFC Systems, Inc., an ERP (Enterprise Resource Planning) and precision Read More
Wilbur-Ellis’ new fertilizer blending facility, located in Mott, ND, was designed by A.J. Sackett & Sons.
BlendersSackett-Waconia Restructures its Sales Force
June 12, 2017
Sackett-Waconia has added three new positions to their sales team: John Lamneck as Regional Account Manager – Eastern U.S.; Craig Read More
Trending Articles
PrecisionAg Vision Conference
Precision AgPrecisionAg® Vision Conference: Focused on the Future
June 13, 2017
PrecisionAg® is pleased to announce the return of its PrecisionAg Vision Conference, October 10-12, 2017. Based on overwhelmingly positive response Read More
Redbanded-stinkbug-on-soybean-Photo-credit-Thomas-County-Ag
Crop InputsExperts: Mild Winter, Early Planting Will Increase Soybean Insect Threat
June 12, 2017
Higher than average temperatures this past winter affected much of the nation, especially the South and Midwest. The National Centers Read More
Eric SfiligojMonsanto ‘Picks Its Battles’ by Nixing Deere Deal
May 23, 2017
Having been in the trade journalism game since the mid-1980s, I remember several watershed moments during my career. One of Read More
Migrant farm workers
LegislationTrump: Immigration Crackdown Won’t Impact U.S. Agriculture
May 16, 2017
President Donald Trump said he would seek to keep his tough immigration enforcement policies from harming the U.S. farm industry Read More
AGCO Ratliff featured
Eric SfiligojRemembering Robert Ratliff
May 15, 2017
With all the fast-paced happenings in agriculture this spring, with multiple mergers in the works and planting season in full Read More
Case sprayer nozzle closeup
EquipmentSpray Application: A Nozzle Renaissance
May 2, 2017
If you had asked four-decade ag veteran Mark Bartel, President of Wilger Inc., just a few years ago what lay Read More
Latest News
ManagementDow Field Day and More Cooperative Consolidation
June 28, 2017
CropLife Editor discusses his recent attendance at the Dow AgroSciences Field Day in Indiana and shares news on another pair Read More
Young Corn Plants
Eric SfiligojLaunching New Seed Traits: Wait on China . . . Or Else!
June 26, 2017
In life, no one likes the waiting game. In agriculture, however, playing the waiting game is very important – especially Read More
Monsanto sign
Crop InputsMonsanto Speaks on Dicamba Issues in Arkansas
June 26, 2017
Monsanto’s Chief Technology Officer, Robb Fraley, issued the following statement following the Arkansas State Plant Board’s proposal to ban dicamba, Read More
Corn Field
Seed/BiotechCorn Insect Bt Technologies Offer Cost-effective, Proac…
June 26, 2017
When farm economics are challenging, farmers look for ways to bolster profit margins, including reducing input costs. Some may think Read More
Crop InputsArkansas Plant Board Votes to Ban Dicamba — Now W…
June 23, 2017
The Arkansas State Plant Board has voted to pass a proposed emergency rule to ban the use of in-crop dicamba, Read More
Engenia soybeans
Crop InputsBASF: ‘Closely Monitoring’ Dicamba Situatio…
June 22, 2017
BASF, whose Engenia herbicide is the target of more than 200 drift complaints in Arkansas, emailed the following statement to Read More
ManagementConsolidation Update
June 22, 2017
Editors Paul Schrimpf and Eric Sfiligoj discuss progress on manufacturer consolidation, and another big move for Midwest cooperative Central Valley Read More
Palmer pigweed seedhead in cotton
Crop InputsThreat of Dicamba Ban Looms in Arkansas
June 22, 2017
The Arkansas State Plant Board has rejected a proposed ban on the use of dicamba herbicide, but a procedural error Read More
Potash Agrium
Crop InputsAgrium-PotashCorp to become Nutrien upon Merger Complet…
June 21, 2017
Potash Corporation of Saskatchewan Inc. and Agrium Inc. have announced today that once the anticipated merger transaction closes, the new Read More
Crop InputsMidwestern BioAg Hosts TerraNu Fertilizer Plant Opening…
June 20, 2017
Last Friday, Midwestern BioAg was joined by over 80 local farmers, media and staff to celebrate the grand opening of Read More
Soybean Field
Industry NewsAligned Ag Distributors Names New President
June 19, 2017
Aligned Ag Distributors LLC announced this morning the appointment of Mary Tolke to the position of President/CEO, effective July 1. Read More
ManagementPlotting Corn, AGCO/Asmark’s Applicator Training Center…
June 15, 2017
Editors Paul Schrimpf and Eric Sfiligoj talk about their recent visits to Columbus, OH, and Bloomington, IL, along with an Read More
Seed/BiotechDow AgroSciences Announces Launch of Enlist Corn for 20…
June 14, 2017
Enlist corn will be commercially available in the U.S. for the 2018 growing season. Dow AgroSciences announced the launch today Read More
ASMARK AGCO Applicator Training Center
EmployeesAsmark, AGCO Open Training Center for Beginning Applica…
June 13, 2017
AGCO Corp. and the Asmark Institute have opened a new Applicator Training Center, created in a collaboration between the two Read More
Power to Do More Contest Winners
HerbicidesDow AgroSciences Announces Three Winners in Power to Do…
June 13, 2017
Thousands of votes have been cast and three farmers have been awarded the power to do more with a $10,000 Read More
Frogeye leaf spot
FungicidesStrobilurin-resistant Frogeye Leaf Spot Threat Looms wi…
June 13, 2017
Heavy spring rainfall throughout the South and Midwest delayed planting and created the perfect environment for diseases like frogeye leaf Read More
PrecisionAg Vision Conference
Precision AgPrecisionAg® Vision Conference: Focused on the Future
June 13, 2017
PrecisionAg® is pleased to announce the return of its PrecisionAg Vision Conference, October 10-12, 2017. Based on overwhelmingly positive response Read More
CHS St. Paul, MN fertilizer terminal
LegislationICGA Praises President Trump’s Remarks on Waterwa…
June 12, 2017
Illinois Corn Growers Association President Justin Durdan, a farmer from Utica, issued the following statement regarding President Donald Trump’s comments Read More