Ag Retail Consolidation: Going Nowhere But Up

My partner in crime shared some of the early returns from our 29th CropLife 100 research project, and so far there haven’t been any wild surprises. But one that has piqued my attention is the last one Eric Sfiligoj mentions: Consolidation.

We’ve seen some interesting moves this year to be sure, and each with a pretty robust price tag. This past summer, Monsanto stunned almost everyone with its $250 million dollar purchase of Precision Planting. This planting technology will soon be the equipment growers will be required use to carry out the plant population and depth recommendations Monsanto will be dispensing via its FieldScripts program.

In September, BASF turned rumor into reality when it announced the purchase of Becker Underwood for the hefty price of $1 billion. The deal is expected to close by year’s end.

Closer to “home” for retailers was the announcement in September that Pinnacle Agriculture holdings had acquired a controlling share of southern retailer Jimmy Sanders Inc., Cleveland, MS, the largest regional retail player in the Mid-South. Sanders had been on the block for some time, and this deal had been in the rumor mill this summer.

Pinnacle Agriculture, as some of you are probably personally aware, has been aggressively pursuing a U.S. retail presence, led by long-time retail executive Kenneth Cordell. His efforts are being funded by Apollo Global Management LLC, the same outfit that built up and then sold United Agri Products to Agrium in late 2007. No doubt this won’t be the last we hear from Pinnacle before CropLife’s December issue hits the mail.

What has been particularly astounding has been the purchase price for some of these entities, which at the time I would have characterized as “top dollar” for what I, and others I’ve talked to, would have estimated. Our free enterprise system has always taught us that to succeed you need to “buy low.” Looking at the cost of acquisition right now and the timing of the purchases, you’re left with one conclusion: the only place for market value to go in agriculture is up.

Not that investors in other markets haven’t made the mistake before of investing at a high level right before a crash. We’re still trying to climb out of that scenario in the housing market and elsewhere in our beleaguered economy. But it’s clear that the folks with cash to spend are saying that they don’t expect this run to end anytime soon.

Beyond the big guns of Apollo, there are plenty of rumors out there about possible acquisitions and mergers among retailers big and small. For folks on the brink of retirement or transition, these are times for making difficult decisions. Should I hang on or hang it up? Pass it on or cash in? It feels like 2013 could be a watershed year.

As the only media group exclusively serving the ag distribution channel, you can rely on CropLife magazine and our Website for information and ideas related to the issues most affecting you and your business, including consolidation. Specifically, look for a new series of articles on the future of retailing beginning this January. We look forward to being your information partner for years to come.

Topics:

Leave a Reply

State of the Industry Stories
State of the IndustryAgriculture’s Troubled Waters
March 3, 2014
Water quantity and quality issues threaten to hamper agriculture on a wider scale in the not-too-distant future. Technology breakthroughs and improved practices are providing potential solutions. Read More
State of the IndustrySponsor Profiles: Simplot, SST And WinField Support CropLife State Of The Industry Report
January 8, 2014
The sponsor partners of the CropLife State of the Industry report have demonstrated ongoing leadership including their support of this report. Read More
State of the Industry2014 State Of The Industry: Agricultural Concerns Creep In
January 2, 2014
With many strong sales years under its belt, the agricultural community is hoping for another positive growth experience in 2014, but mindful of a few challenges that might keep this from happening. Read More
State of the IndustrySeed Systems Top Watch List
January 2, 2014
Retailers are closely following herbicide tolerance and drought resistance traits. Read More
Top 100 Articles
Milan Kucerak, president/CEO, West Central
CropLife 100West Central Cooperative And Its New President Are A Match Made In Deviation
June 29, 2015
To appreciate just how unique West Central Cooperative is in the world of ag retail, an observer need only consider Read More
Winter Wheat
CropLife 100South Dakota Co-op Member Owners Vote No On Unification
June 26, 2015
The Boards of Directors for North Central Farmers Elevator (NCFE) and Wheat Growers (WG) have announced that member-owners have voted Read More
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 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
Latest News
FertilizerVerdesian Announces Central America Plant Nutrition Exp…
July 7, 2015
Verdesian Life Sciences has signed a commercial agreement with Agroalfa in Central America to bring the company’s patented polymer technology to Read More
Chesapeake Bay
ManagementCourt Decision Protects Chesapeake Bay’s Water, Wildlif…
July 7, 2015
Today, the Third Circuit Court of Appeals upheld the historic clean-up plan for the Chesapeake Bay. Collin O’Mara, president and Read More
Agworld Apple Watch Farm Management
EquipmentAussie Data Management Software Company Making Its Mark…
July 4, 2015
Western-Australia-based Agworld — having fully launched its data management software system stateside last year after a 2013 soft launch — Read More
Topcon AGI-4 on MF Planter
EquipmentAutosteer: Compatibility, Accuracy Remain Top Of Mind
July 3, 2015
The world of automatic steering solutions in agriculture has evolved rapidly in the last few years. From after-market add-ons that Read More
ManagementUnited Suppliers/Land ‘O Lakes Merger & Crop Update
July 2, 2015
CropLife’s Paul Schrimpf and Eric Sfiligoj talk about the reasons behind the United Suppliers/Land ‘O Lakes merger and USDA’s recent Read More
Industry NewsBioSafe Adds To Sales Force
July 2, 2015
BioSafe Systems has announced the hire of two new members for its service team. David Britt recently joined the team Read More
Chesapeake Bay
ManagementChesapeake Bay Clean-Up Gets Renewed Attention
July 2, 2015
The Chesapeake Bay has been called one of the most biologically productive ecosystems in the world. It’s also one of Read More
Measuring Bulk Tanks
ManagementBulk Pesticide Compliance: Top 10 Areas Of Improvement …
July 1, 2015
  In honor of the 33-year run of David Letterman’s Late Show, the American Agronomic Stewardship Alliance (AASA) is happy Read More
Industry NewsArysta North America Hires Midwest Sales Manager
July 1, 2015
Arysta LifeScience North America recently announced the hiring of Brian Battles as the Senior Technical Sales Manager for the Midwest Read More
Farmer on tablet
Eric SfiligojThe Never-Ending Battle Against Modern Agriculture
July 1, 2015
In the world of comic books, the character of Superman often refers to the fight to save the world as Read More
Retail FacilitiesBuilding Up Ag Retail
July 1, 2015
In the oftentimes unpredictable world we live in, it’s nice to know some things can be reliably countered on to Read More
Retail FacilitiesMaple River Grain And Agronomy Phases In Site Developme…
July 1, 2015
Marcus Construction helped Maple River Grain and Agronomy in Casselton, ND, with the design-build of its dry fertilizer, liquid chemical/seed Read More
Retail FacilitiesA&B Welding Builds A New Liquid Terminal Hub For Br…
July 1, 2015
To build its new hub facility, Briggs Crop Nutrients enlisted the help of A&B Welding. The result, an efficient facility Read More
Edon Farmers Co-op
Retail FacilitiesNew Marcus Facility At Edon Farmers Co-op Provides More…
July 1, 2015
Edon Farmers Co-Op in Edon, OH, needed a new facility to consolidate outdated locations. Marcus Construction was able to design Read More
Retail FacilitiesKinder Morgan Expands Its Storage With A New Dome Barre…
July 1, 2015
Kinder Morgan wanted additional covered storage at its Dakota Bulk Terminal on the Mississippi River in St. Paul, MN. With Read More
Retail FacilitiesHeartland Tank Protects Fertilizer From Extreme Cold At…
July 1, 2015
The Arthur Companies in Harvey, ND, enlisted the help of Heartland Tank Companies to develop a new liquid fertilizer facility Read More
The McGregor Co. fertilizer loadout
Retail FacilitiesThe McGregor Co. Partners With Kahler Automation To Cre…
June 30, 2015
Kahler Automation helped The McGregor Co. expand its Clarkston, WA, operation with unstaffed loadout technology that enables customers to pick Read More
Dry and Liquid Plant
Retail FacilitiesKahler Automation Helps CHS Dakota Ag Cooperative Build…
June 30, 2015
CHS Dakota Ag Cooperative in Mooreton, ND, wanted a liquid/dry blender system that could meet the needs of its customers Read More