PACE Annual Report 2008

Retailers

Market studies indicate that after a long period of increasing operational size, large growers aren’t trying to increase acreage beyond where they are today. Instead, these operations and the individuals that run them have evolved from strictly growers to business managers. In this capacity, large growers are becoming more interested in areas such as finance and credit and not as interested in “just buying products at the cheapest price.”

In some ways, retailers say they are at a relationship disadvantage with many growers when it comes to risk management. Fertilizer deals made on a handshake can create devastating risks when companies buy high and get trapped in a sudden price drop that the grower expects to receive. 

 

Seed / Biotech

Retailers say their seed profits have taken a step backward in 2008. Many say there are too many brands out in the market or competing ideas on how to effectively sell seed to grower-customers. Being a full-time seed expert and understanding how these inputs can help individual growers is the key to making this segment become more profitable in the future.

Surprisingly, the demand for conventional seed in some markets grew in 2008 as growers revolted against paying higher tech fees for biotech seed types. Still, the demand for biotech seed was growing, specifically with increased interest in LibertyLink soybeans as an alternative to Roundup Ready varieties.

 

Fertilizer

Fertilizer prices, which had been moving upward at a steady clip throughout 2007 and early 2008, suddenly headed downward, with anhydrous ammonia and urea both experiencing steep drops in price. This softening in price has many retailers that bought their fertilizer ahead (and at higher market prices) wondering how to make a profit during the 2009 growing season.

Besides price, transportation continues to be an issue. Railroads continue to balk at hauling anhydrous ammonia (NH3), driving up its price and keeping supply situations tight. Many retailers are exiting the NH3 market altogether rather than fight this distribution battle, coupled with insurance and security risks.  

 

Equipment/Precision

Bigger equipment has become the norm, with spray booms now averaging 120 feet in length. The use of automatic steering has become widespread and high clearance sprayers are on the horizon from several major manufacturers. Precision technologies continue to grow. There was big growth during 2008 in the areas of automatic boom shut-off control, automatic boom leveling systems, and GPS technology, and this is expected to continue during 2009. 

 

Biofuels/Crop Intentions

Retailers report that demand and excitement regarding biofuels has dropped off significantly, particularly for ethanol as oil prices have dropped. Many observers feel corn ethanol will not be a growth area for the industry in 2009 or beyond.

With corn for ethanol demand dropping, there are numerous predictions that soybeans will be the king row crop in 2009 — at least in terms of new planting. Corn, wheat, and cotton will all lose acres in 2009 to soybeans, which could also benefit from fewer crop input demands and higher commodity prices relative to other row crops.

 

Crop Protection

Retailers saw a significant increase in fungicide applications in many areas of the country, with many growers using these products as a way to increase their yields, particularly in corn. Still, the equipment to apply fungicides as preventives isn’t there yet for many retailers. But equipment manufacturers are planning to introduce a host of ground-based sprayers in 2009 that will be able to apply fungicides over-the-top of corn, so the market should remain strong.

Spray drift remains a big area of concern for the marketplace. New EPA drift reduction lists might contain mandatory buffer zone requirements, which the application industry opposes. “Some in government feel that based upon the evidence and our technical advances that zero drift is possible,” said one PACE Council Member. “But we need to make the point back to government that although zero drift is our goal, it’s not attainable.”

Leave a Reply

Management Stories

Roy Blunt
LegislationARA Recognizes Blunt, Heitkamp For Legislative Efforts Supporting Agriculture
February 17, 2017
Agricultural industry continues to face federal regulatory challenges. Thankfully, agriculture’s allies in the U.S. Senate stepped forward. The Agricultural Retailers Read More
LegislationThe Fertilizer Institute Commends Senate On Confirmation Of New EPA Administrator
February 17, 2017
The Fertilizer Institute (TFI) President Chris Jahn issued the following statement on the Senate confirmation of Oklahoma Attorney General Scott Read More
Trump, Senate, Cabinet
LegislationBREAKING: Trump EPA Nominee Scott Pruitt Confirmed by Senate
February 17, 2017
Scott Pruitt, who as Oklahoma’s attorney general spent years suing the Environmental Protection Agency over its efforts to regulate various Read More
ManagementFebruary Road Trip Edition
February 17, 2017
Editors Paul Schrimpf and Eric Sfiligoj discuss their recent visits to Indiana and Kentucky. Read More
Trending Articles
Farmer and aptop
Matt Hopkins10 Warning Signs Your Website Is Grossly Outdated
February 8, 2017
Your Website is often a visitor’s first impression of your ag retail business. A positive first impression can set the Read More
AgriSync
Matt Hopkins17 Agriculture Apps That Will Help You Farm Smarter In 2017
December 9, 2016
Ag professionals are working smarter, not harder, than ever before. Smart farming technologies have enabled them to reduce costs, maximize Read More
R4023 Sprayer, John Deere
CropLife 100Ag Retail Equipment Report: The Green Party Continues
December 7, 2016
In the annual race for sales in the ag retail equipment marketplace, the color schemes for participants are a little Read More
Mike Stern
Precision AgClimate Corp. CEO Talks Retailer Support For Digital Ag
December 1, 2016
CropLife Magazine’s sister publication, AgriBusiness Global, recently sat down with Mike Stern, CEO of The Climate Corp., following the Monsanto subsidiary’s Read More
Precision AgTrimble Debuts End-to-End FMIS Platform
November 28, 2016
October’s inaugural PrecisionAg Vision Conference left this author with many thoughts and things to ponder in the coming months. Probably Read More
CHS Primeland
CropLife 100The 2016 CropLife 100 Report: Reviewing The Many Bulls And Bears Impacting This Year’s Marketplace
November 28, 2016
For virtually all of 2016, the nation was wholly focused on the big Presidential election. Some folks aligned themselves with Read More
Latest News
Roy Blunt
LegislationARA Recognizes Blunt, Heitkamp For Legislative Efforts …
February 17, 2017
Agricultural industry continues to face federal regulatory challenges. Thankfully, agriculture’s allies in the U.S. Senate stepped forward. The Agricultural Retailers Read More
LegislationThe Fertilizer Institute Commends Senate On Confirmatio…
February 17, 2017
The Fertilizer Institute (TFI) President Chris Jahn issued the following statement on the Senate confirmation of Oklahoma Attorney General Scott Read More
Trump, Senate, Cabinet
LegislationBREAKING: Trump EPA Nominee Scott Pruitt Confirmed by S…
February 17, 2017
Scott Pruitt, who as Oklahoma’s attorney general spent years suing the Environmental Protection Agency over its efforts to regulate various Read More
ManagementFebruary Road Trip Edition
February 17, 2017
Editors Paul Schrimpf and Eric Sfiligoj discuss their recent visits to Indiana and Kentucky. Read More
Heritage Cooperative Finished Building Aerial
ManagementHeritage Cooperative, Agland Co-op Approve Merger
February 17, 2017
Agland Co-op and Heritage Cooperative stockholders have both approved the merger agreement between Agland Co-op and Heritage Cooperative. Now begins Read More
LegislationARA Fly-In: Ag Retail Descends on Capitol Hill, Lawmake…
February 15, 2017
More than 100 agricultural retailers, distributors and suppliers headed to Capitol Hill Tuesday morning for the Agribusiness Congressional Fly-in, according to a Read More
Untreated soybean seed Heartland Coop
Seed/BiotechMarrone Bio Innovations, Groundwork BioAg Bio-stacked M…
February 13, 2017
Marrone Bio Innovations, Inc. and Groundwork BioAg, Ltd have announced successful seed treatment field trials of the world’s first all-biological Read More
NL5000 With G5 Technology
SpreadersNew Leader Introduces NL5000 Dry Nutrient Applicator Wi…
February 13, 2017
New Leader, a division of Highway Equipment Company (HECO), has announced the next generation of spreading technology with the NL5000 Read More
Fertilizer Storage
Crop InputsThe State Of The Fertilizer Industry
February 9, 2017
He’s all hat, no horse.” It’s a humorous way of describing a person who tells a good story, but is Read More
CropLife 100Pinnacle Agriculture Agrees To Credit Agreement Amendme…
February 9, 2017
Pinnacle Operating Corp. has entered into an amendment (the “Amendment”) to its First Lien Credit Agreement that will provide for, Read More
ManagementUpdates on Upcoming Trips, Dow-DuPont, and the Des Moin…
February 9, 2017
Editors Paul Schrimpf and Eric Sfiligoj review a few future travels, along with the latest on big company mergers and Read More
Championship Tractor Pull
EquipmentNational Farm Machinery Show Highlighted By Championshi…
February 9, 2017
The scream of monster engines, the stench of burning rubber and the ground-pounding vibrations of the country’s largest, loudest and Read More
Farmer and aptop
Matt Hopkins10 Warning Signs Your Website Is Grossly Outdated
February 8, 2017
Your Website is often a visitor’s first impression of your ag retail business. A positive first impression can set the Read More
Corn Field
InsecticidesArysta LifeScience, DuPont Collaborate On Rynaxpyr Prem…
February 8, 2017
Arysta LifeScience recently announced that it has entered into a global collaboration with DuPont Crop Protection for the development of Read More
Industry NewsThe Fertilizer Institute Board Elects New Chairman, Vic…
February 8, 2017
The Fertilizer Institute’s (TFI) Board of Directors has elected Chuck Magro, President and CEO of Agrium, and Tony Will, President Read More
Sonny Perdue
ManagementARA Joins More Than 600 Organizations In Support Of Per…
February 8, 2017
The Agricultural Retailers Association (ARA) recently joined with more than 600 agricultural groups on a letter of support for Governor Read More
World Agri-Tech Innovation Summit Panel 2016
Crop InputsWorld Agri-Tech Innovation Summit To Be Held In San Fra…
February 8, 2017
“Breakthrough Applications and Business Models for Sustainable Farming” is the theme of the World Agri-Tech Innovation Summit to be held Read More
Cedar Country Cooperative
Eric SfiligojConsolidation In Agriculture: More Middle Movement
February 7, 2017
If you’ve regularly followed my column, you know I’m something of a movie junkie. Like many, one of my favorite Read More