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
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
Monsanto sign
Crop InputsMissouri Governor Meets With Bayer CEO To Discuss Monsanto Merger
November 21, 2016
Missouri Gov. Jay Nixon visited Bayer AG global headquarters in Leverkusen, Germany, on November 18 to discuss the proposed Bayer-Monsanto Read More
STS16 2017
SprayersHagie Manufacturing Releases 2017 STS16 Sprayer To Market
November 16, 2016
Hagie Manufacturing LLC’s largest full season applicator is now available with enhancements for the 2017 model year. Hagie is officially Read More
Latest News
ManagementARA 2016 Report and Crop Mix for 2017
December 9, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about the recent Agricultural Retailers Association meeting and the projected acreage mix for Read More
AgriSync
Matt Hopkins17 Agriculture Apps That Will Help You Farm Smarter In …
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
Ryan Bartlett
Crop InputsCompass Minerals Appoints Vice President, Innovation An…
December 8, 2016
Ryan Bartlett, Ph.D., has joined Compass Minerals as vice president, innovation and product development. Dr. Bartlett will be responsible for Read More
HerbicidesHerbicides 2017: New Cropping Systems Set For Debut
December 7, 2016
Herbicide-resistant weed are inching ever-closer to a potentially frightening saturation point here in the U.S. Heading into 2016, USDA planting Read More
CropLife 100Wilbur-Ellis Acquires Michigan Ag Retailer
December 7, 2016
Wilbur-Ellis’ Agribusiness, a recognized leader in precision agriculture technology and the distribution and marketing of plant protection, seed and nutritional Read More
Fertilizer storage The Andersons
CropLife 1002016 Fertilizer Report: Another Really Rough Year For A…
December 7, 2016
In many ways, the fertilizer category cannot seem to catch a break. During the early part of the 2010s decade, 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
Winter wheat
HerbicidesTalinor Herbicide Approved For Wheat And Barley
December 7, 2016
Talinor herbicide from Syngenta has received federal registration from the U.S. EPA, giving wheat and barley growers a new option Read More
Forage Sorghum
UncategorizedMilestone Achievement Continues For Dow AgroSciences, A…
December 7, 2016
New and innovative forage products are on the horizon driven by continued collaboration between Dow AgroSciences, a wholly owned subsidiary Read More
Palmer pigweed seedhead in cotton
HerbicidesNew WSSA Factsheet Explores Weed Seeds And Their Longev…
December 7, 2016
Did you know some weed seeds can lie dormant in the soil for more than a century and then sprout Read More
Crop InputsARA 2016: 5 Developments Worth Monitoring Into 2017
December 6, 2016
You can pretty much set your watch to it (do people even still wear watches? I know I do…but I’m Read More
Tim McCardle, ARA Chairman
CropLife 100BRANDT COO Named ARA Chairman
December 5, 2016
BRANDT EVP and Chief Operating Officer Tim McArdle has been named chairman of the Agricultural Retailers Association (ARA) during a Read More
Crop InputsWilbur-Ellis Receives ResponsibleAg Certification At Mo…
December 5, 2016
Wilbur-Ellis Co., a recognized leader in precision agriculture technology and the distribution of crop protection products, announces the ResponsibleAg certification Read More
Young Corn Closeup
Eric SfiligojThe Read On 2017 For Agricultural Fortunes Is Anybody’s…
December 5, 2016
As I (and others) have written in recent months, the nation has just experienced one of the most offbeat election Read More
Acceleron B-300 seed coating
Crop InputsThe BioAg Alliance Launches New Yield-Boosting Microbia…
December 5, 2016
As part of their commitment to develop and commercialize innovative microbial solutions for farmers through The BioAg Alliance, Monsanto Co. Read More
ManagementCorn and soy planting update; Takeaways from Climate Co…
December 2, 2016
AgriBusiness Global Editor Dave Frabotta Joins Paul Schrimpf for a discussion of global corn and soybean planting trends, and a Read More
Radish cover crop taproot
Crop InputsSoil Health Institute, Datu Research Receive Grant To E…
December 1, 2016
The Soil Health Institute (SHI) and Datu Research have announced a $626,000 grant from the Walton Family Foundation to quantify the 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