Ag Retail Roundtable: State Of The Industry In 90 Minutes

The annual Agricultural Retailers Association (ARA) meeting is a great gathering place for many of the industry’s most influential representatives. In this spirit, CropLife magazine (and several of its sponsors) have used this venue to bring together several of the leading ag retailers to debate in its annual State of the Industry Roundtable event. The 2012 ARA was no exception, with leaders from five of the nation’s largest ag retailers taking part in the 4th annual State of the Industry Roundtable during an informative 90-minute session.

“This is a great place to get-together to discuss all the key issues and trends affecting our market, now and going forward,” said CropLife Group Editor Paul Schrimpf during the meeting’s opening moments.

In attendance at the 2012 meeting were Doug Busdeker from The Andersons, Jeff Eggleston from Hintzsche Fertilizer, Dave Default from J.R. Simplot Co., Dan Weber from Ceres Solutions and Scott Firlus and Rick Grabowski from Wisconsin River Co-op. Also in attendance were Daren Coppock, head of ARA, a group of international trade association representatives from Canada, France and Brazil and State of the Industry sponsors including J.R. Simplot, SST Software and Winfield Solutions. To keep the discussion open, CropLife promised participants that it would not directly attribute any comments made during the roundtable event to them.

Water Worries

Not surprisingly, water – or the lack of it – dominated the early debate on top industry concerns. Although many of the roundtable representatives believed that the drought conditions that gripped much of the nation during 2012 didn’t severe damage the nation’s crop, most believed that another such “super dry weather” event in 2013 “would be difficult for many of the growers in our area to overcome.” In particular, several participants thought this situation would be made worse in parts of the Great Plains and West, where much of the crop is irrigated, because of further water use restrictions on top of the ones that were imposed during 2012.

Lack of water was also a concern for many ag retailers when it comes to transportation. As one State of the Industry participant pointed out, approximately $7 billion worth of commerce annually travels down the Mississippi and Illinois Rivers – and a sizable portion of this total includes the fertilizers and crop nutrients grower-customers rely on to keep their yields (and subsequent profits) up. “If we can’t reliably use river barges to move this product to where we need it, it will have to travel overland,” said one roundtable participant. “That would increase our costs significantly and, ultimately, the customers.”

Profit Drivers

During the State of the Industry roundtable, everyone acknowledged that being an ag retailer these past few years has been “good.” With commodity prices remaining high and grower-customers in a “spending mood,” the nation’s top ag retailers have experienced some of their most profitable years ever in terms of revenue.

Naturally, some segments of the ag retail business have risen above the rest when it comes to profitability. And although major crop inputs sectors such as fertilizer were key market drivers during 2012, they weren’t necessarily the main profit drivers for ag retailers, said roundtable participants. Instead, smaller niche items such as foliars for feeding and starter fertilizer provided much more profit for the country’s biggest ag retailers.

“This is being driven by a desire to increase yields in any way possible,” said one participant. “Using pre-applied nutrients and foliars can possibly increase yields three to five bushels per acre, and that’s an investment growers are willing to make with ag economics where they are today.”

In addition to growers, ag retailers are also willing to make some investments in their operations given how well the marketplace has performed recently. In particular, said roundtable participants, technology is an area where “substantial investment” is taking place. Many ag retailers were already equipping their field reps with smartphones and other mobile devices to improve their ability to communicate (with both the grower-customers and their home offices), with several more working with logistics packages designed to increase the efficiency of machine usage in the field.

“Right now, our only fear with implementing all this technology into our operations is the hope that it isn’t going to be outdated within the next two years,” said one participant.

Going forward into 2013 and beyond, many State of the Industry participants said market watchers should keep an eye on ag retail consolidation. The past few years, with market conditions very favorable, many companies have spent their time building up their revenues while servicing their existing territories. However, if the market should take a sudden downturn in the coming years, consolidation could come back “into vogue” as a way to increase a company’s bottom line and market penetration quickly.

Leave a Reply

State of the Industry Stories

Liquid Fertilizer Storage tanks
State of the IndustryComplex Fertilizer Market Brings Mixed Feelings
January 5, 2016
Declining fertilizer prices and plentiful supplies should be good news for growers facing low crop prices. But they and their Read More
Asmus Farm Supply crop protection products in storage
State of the Industry2016 Crop Protection Outlook: The Guessing Game
January 4, 2016
One would naturally assume that retail sales of crop protection products in a contracted market would themselves be contracted, but Read More
Seed corn bags in storage
Special ReportsThe Outlook For Seed In 2016
January 3, 2016
Among all crop input categories going into 2016, the seed category has as many questions regarding which direction it will Read More
Wilbur-Ellis’ new fertilizer blending facility, located in Mott, ND, was designed by A.J. Sackett & Sons.
State of the IndustryBuying Intentions Survey: Retailers Taking A Prudent Approach In 2016
January 2, 2016
The CropLife® magazine Buying Intentions Survey made its debut last year to gauge current industry trends against the retailer’s plans Read More
Trending Articles
Bayer Monsanto
Crop InputsBayer-Monsanto Mega-Merger: 6 Things You Need To Know
September 14, 2016
Mega mergers have become almost routine in the agricultural industry. Right on the heels of Monday’s news that fertilizer giants Potash Read More
Potash Corp Agrium
Crop InputsAgrium, Potash Corp To Merge To Create $36 Billion Company
September 12, 2016
Canada’s Agrium Inc. and Potash Corp of Saskatchewan Inc. have agreed to combine in a deal that would create a Read More
Osage Co-op Elevator Osage, IA Finished Building
OpinionAre We Crazy?
September 8, 2016
At some point in the first few months of my employment here at CropLife® magazine, I started getting curious about Read More
ManagementMAGIE 2016 Highlights and Deere Anti-Trust
September 1, 2016
CropLife Editor Eric Sfiligoj discusses the recent Midwest AG Industries Exposition and the Department of Justice’s objection to John Deere Read More
ASMARK 2016 Retailers Live! Tour - CPS
CropLife 100CPS Acquires Texas Retail Operation
August 23, 2016
Crop Production Services (CPS) has acquired the assets of Larry’s Chemical and Spray, Inc., for an undisclosed amount in an Read More
Key Cooperative Marcus Construction Steel Building
Retail FacilitiesMarcus Construction Builds High-Speed Agronomy Center For Key Cooperative
July 7, 2016
Key Cooperative in Grinnell, IA, wanted a state-of-the-art Agronomy Center to better serve its customers. Marcus Construction delivered exactly that. Read More
Latest News
Syngenta Seedcare Institute
Seed/BiotechSyngenta Opens New North America Seedcare Institute In …
September 23, 2016
Syngenta unveiled its new Seedcare Institute in Stanton, MN, during a recent grand opening celebration. More than 150 industry leaders, Read More
StewardshipMonsanto Invests $1.6 Million In System To Quantify Gre…
September 23, 2016
The USDA – Natural Resources Conservation Service (USDA-NRCS) recently awarded the National Corn Growers Association (NCGA) and its Soil Health Read More
Pipe rack
LegislationCourt Sides With Ag Retailers On PSM
September 23, 2016
The D.C. Court of Appeals has ruled the Occupational Safety and Health Administration violated the Occupational Safety and Health Act when Read More
ManagementPacific Coast Fertilizer Announces Interest In Longview…
September 22, 2016
Pacific Coast Fertilizer LP (PCF) announced at the Cowlitz Economic Development Council board of directors meeting its interest in developing Read More
Young corn plants in soil
UncategorizedCool Planet Raises Additional $9 Million To Commerciali…
September 22, 2016
Cool Planet has announced the first close of a new financing round to commercialize the company’s Cool Terra Engineered Biocarbon Read More
Crop InputsJim Loar Promoted To President And CEO Of Cool Planet
September 22, 2016
In a move that reflects and reinforces the company’s commitment to the agricultural market, the Cool Planet board of directors Read More
BlendersNorth Dakota Coop Debuts Dry Fertilizer Plant
September 22, 2016
North Central Grain Cooperative has begun operations at a new dry fertilizer plant at its Rolla, ND, site. It is Read More
Crop InputsMonsanto, Bayer Officials Defend Proposed $66 Billion M…
September 21, 2016
Top officials for Monsanto and Bayer defended their proposed $66 billion merger before skeptical senators on Tuesday, insisting that the Read More
ManagementUpcoming Shows & Recent Events
September 19, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about upcoming trade shows and events and review the Mid America CropLife Association Read More
Industry NewsVerdesian Life Sciences Appoints New CEO
September 19, 2016
Verdesian Life Sciences, a plant health and nutrition company, today announced that its board of directors has named Kenneth M. Avery Read More
Corn
Crop InputsEPA Settles With Syngenta For Alleged Multi-Regional Pe…
September 19, 2016
The U.S. EPA has announced a multi-region settlement with Syngenta Crop Protection, LLC (Syngenta) in Greensboro, NC, for alleged violations of Read More
ManagementMerger Mania
September 16, 2016
Editors Paul Schrimpf and Eric Sfiligoj discuss this week’s mega-ag mergers of Bayer and Monsanto and Potash and Agrium. Read More
Monsanto sign
Crop InputsMonsanto Ends Up Being A Bargain For Bayer
September 16, 2016
History will say Bayer got a bargain in its $66 billion purchase of Monsanto, writes David Nicklaus, St. Louis Post-Dispatch. The Read More
Greg Musson, Gar Tootelian
CropLife 100California Ag Retailer Steps Up To Feed Families Affect…
September 16, 2016
GAR Tootelian, Inc. (GAR) in Reedley, CA, is challenging the Central Valley to help raise enough money and provide 525,000 meals Read More
Crop InputsBayer, Monsanto CEOs Discuss Merger
September 15, 2016
Werner Baumann, Bayer CEO, and Hugh Grant, Monsanto CEO, discuss why they decided to merge their companies. Read More
Corn close up
Crop InputsNY Times: Bayer-Monsanto a Bad Deal for Farmers
September 15, 2016
Via NY Times: Don Halcomb, a 63-year-old farmer in Adairville, KY, is expecting his profit to vanish this year, largely Read More
Werner Baumann, Bayer AG, and Hugh Grant, Monsanto
Crop InputsBayer-Monsanto Merger Creates New Global Ag Giant
September 14, 2016
During the whole of 2016, many of the companies that do business in the agricultural industry have concluded the best Read More
Bayer Monsanto
Crop InputsBayer-Monsanto Mega-Merger: 6 Things You Need To Know
September 14, 2016
Mega mergers have become almost routine in the agricultural industry. Right on the heels of Monday’s news that fertilizer giants Potash Read More