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

Adams Decline Weigh Blender
BlendersFertilizer Blenders Take On Latest Additives, Heavy Workloads
February 2, 2016
As agronomy and precision ag sciences continue to advance, blender manufacturers have certainly had their part to play. “We are Read More
The Tule ET sensor in wine grapes.
Precision AgTule Technologies: Monitoring Water Stress Can Unlock Potential
February 2, 2016
Although we mostly stick to the things we know around these parts (corn and beans), we’ve strayed from the traditional Read More
Wacker Neuson WL34
EquipmentWacker Neuson: A Big Reputation With A Small Stature
February 2, 2016
Many observers to the agricultural marketplace might not know the name Wacker Neuson, Menomonee Falls, WI. While the company is Read More
MixMate from Praxidyn
BlendersPraxidyn Introduces Portable Ag Chemical Blending System
January 28, 2016
Praxidyn has introduced Mixmate – the portable agricultural chemical blending system. Mixmate streamlines or completely automates the mixing process with Read More
Top 100 Articles
Elburn Cooperative
CropLife 100Elburn Cooperative Members Vote To Join CHS
December 28, 2015
With 81% of eligible producers voting, 94% cast an affirmative ballot for Elburn Cooperative, a diversified agricultural retailer based out Read More
West Central Cooperative, Jefferson, IA
CropLife 100Farmers Cooperative-West Central Merger Approved
December 21, 2015
The members of Farmers Cooperative Co. (FC), Ames, IA, and West Central Cooperative, Ralston, IA, have both approved the merger Read More
Wheat Growers Innovation Center, Bath, SD
CropLife 100Wheat Growers Opens Innovation Center
December 21, 2015
Wheat Growers’ commitment in providing its farmer-owners with the latest in technological advancements now has a one-of-a-kind focal point, as Read More
CropLife 100ARA Selects The Andersons As 2015 Retailer Of The Year
December 9, 2015
The Agricultural Retailers Association today named Maumee, OH-based The Andersons as its Retailer of the Year for 2015. The award Read More
CPS Washington Court House John Deere Sprayer
CropLife 100Application Equipment Report: It Is Easy Being Green For Top 100 Ag Retailers
December 5, 2015
On The Muppets television show, Kermit the Frog is famous for singing a song about the troubles he encounters in Read More
Fertilizer Bin
CropLife 100Fertilizer Sales: Another Down Year For Top 100 Ag Retailers
December 4, 2015
In pure number terms, the fertilizer category still dominates all crop inputs/services among CropLife 100 ag retailers. In 2015, for Read More
Latest News
Crop InputsMarrone Bio Innovations Submits New Bio-Fungicide For E…
February 9, 2016
Marrone Bio Innovations, Inc. (MBI) today announced that it has submitted a new biological fungicide (MBI-110) to EPA. The broad spectrum Read More
Crop InputsWeed Expert: Adding A Second Herbicide Not Always Easy
February 9, 2016
In my last post, I reviewed some recent research that suggests one of the best ways to delay the evolution Read More
Crop InputsGenetic Literacy Project: Farmers Need More Herbicide C…
February 9, 2016
There are two things that I think just about every weed scientist can agree on, writes Andrew Kniss for The Read More
HerbicidesWeed Expert Warns North Dakota Growers Of Coming Herbic…
February 9, 2016
Ford Baldwin painted a bleak picture of weed control at a recent workshop here exploring the future of ag production, Read More
HerbicidesWSSA Announces New, Updated Free Web Resources
February 9, 2016
Today the Weed Science Society of American (WSSA) announced that new and updated educational materials for both weed scientists and Read More
Soybean field
FungicidesFour Arysta Fungicide Formulations Given FIFRA Approval…
February 8, 2016
Arysta LifeScience North America recently announced the issuance of Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 2(ee) Recommendations for Read More
FungicidesAgri-Fos Systemic Fungicide Plus Receives EPA Registrat…
February 8, 2016
Vivid Life Sciences has announced the EPA registration of Agri-Fos Systemic Fungicide Plus, a highly concentrated active ingredient phosphite fungicide, Read More
Crop InputsBayer Contests EPA’s Decision On Valuable Insecticide F…
February 5, 2016
Crop Science, a division of Bayer, has announced it has refused a request by the Environmental Protection Agency (EPA) to Read More
Wheat Field North Dakota
Seed/BiotechSyngenta Wins Seed Fraud Suit Against South Dakota Grow…
February 5, 2016
Syngenta has obtained a $25,000 settlement from Paul and John Mayclin, Mayclin Farms, Plankinton, SD, in response to their Plant Read More
ManagementOABA Annual Conference Wraps Up In Columbus
February 5, 2016
More than 300 Ohio AgriBusiness Association (OABA) members and industry professionals were on hand to engage in collaborative learning and Read More
Crop InputsBayer To Contest EPA Flubendiamide Decision
February 5, 2016
Crop Science, a division of Bayer, announced today it has refused a request by EPA to voluntarily cancel the uses Read More
Syngenta
Seed/BiotechNot So Fast: ChemChina Syngenta Takeover Could Draw Nat…
February 5, 2016
State-owned China National Chemical Corp. (ChemChina), which plans to buy Swiss seeds and pesticide maker Syngenta, will promptly start preparations Read More
Rendering of Syngenta Seedcare Institute expansion
Seed/BiotechExpansion Of Syngenta’s North America Seedcare In…
February 4, 2016
As demand for seed treatment knowledge and products grows among farmers, retailers and others in the seed industry, Syngenta is Read More
Soybean Field
Industry NewsArysta LifeScience Strengthens Sales Team
February 4, 2016
Arysta LifeScience North America recently announced three new personnel additions: Jake Cook and Peter White are Territory Sales Managers for Read More
Davor Pisk Syngenta COO
Crop InputsSyngenta COO: Why ChemChina Offer Beat Monsanto’s
February 4, 2016
Syngenta Chief Operating Officer Davor Pisk says he is confident the proposed acquisition by ChemChina will ultimately help preserve choice Read More
Young corn plants in soil
Crop InputsKoch Biological Solutions Invests In Pathway Biologic
February 4, 2016
An affiliate of Koch Biological Solutions, LLC has acquired a minority equity position in, and entered into collaboration with, Pathway Read More
Crop InputsABG: China Signs Off On Monsanto’s Roundup Ready …
February 3, 2016
Monsanto Co. on Wednesday announced it plans to launch its Roundup Ready 2 Xtend soybeans in time for the 2016 Read More
Syngenta headquarters in Basel, Switzerland
Crop Inputs6 Things To Know About The ChemChina-Syngenta Deal
February 3, 2016
After months of rumors and speculation, Syngenta has announced that ChemChina has offered to acquire the Swiss-based company. “In making Read More