Early in the process of assembling information for the State of the Industry report, it was assumed that the drought of 2012 would still be fresh in everyone’s mind and a dominant factor in the spending habits and cropping decisions growers will be making in 2013.
But not one of the retailers expressed concern that growers were anything but bullish on the season ahead, and many said that the drought has provided the opportunity to widen the scope of influence and consultation they share.
“We feel our role is very important as we go into 2013 planning and advising our growers to the best of our ability on what scenarios could be played out from now through spring,” says Karl Hensley, vice president of agronomy with Central Valley Ag (CVA), O’Neil, NE. “These growers are more than ever wanting an adviser to help get them through.”
CVA had conducted field trials looking at some of the new drought-tolerant varieties, and they got a major test this past season. “In some dryland areas, no-till combined with drought tolerant varieties picked up 15 to 25 bushel advantage over conventional tillage,” says Hensley. And comparing drought-tolerant hybrids vs. regular hybrids in the same tillage system, a three to nine bushel advantage was realized. “We’ll definitely be looking at using more drought-tolerant seeds in 2013.”
Dave Dufault, manager for the Simplot Grower Solutions retail network, says that its coverage area across the upper Midwest was spared the major consequences of the drought. In fact, as far north as Fargo and Grand Forks, ND, growers were pulling in 150 to 180 bushel dryland corn and 50 bushel soybeans. Good, consistent recommendations for crop inputs helped the growers in these regions cash in.
“Weather volatility is what I would call a game changer for the proactive retailer,” says Cliff Love, general manager at Carolina Eastern-Vail, Auburn, NY. “The proactive retailer will be there with sound advice on practices and products that can help mitigate the loss of investment in various inputs and further prove their worthiness to be the supplier of choice on that farm.”
Monsanto’s Technology Play
Many full-service retailers have spent significant time and capital on adopting technology products and building out precision agriculture services. So when Monsanto announced this past summer its plans to eventually take over hybrid/variety selection and plant population recommendations for all the seed it sells as part of its Integrated Farming Systems (IFS) program, it put many retailers on high alert.
Monsanto is taking implementation relatively slow, pilot testing the system on DeKalb seed with a limited number of growers in 2013. The seed retailer is an integral part of the process, and participating retailers have had to undergo extensive training to get aligned with the program. If successful and relatively smooth, Monsanto is looking to ramp up rapidly.
The uncertainty of exactly how the program will roll out and ramp up is causing heartburn and speculation about the impact on the retailer’s relationship with growers, and many are predicting a tough row to hoe for Monsanto.
“I understand Monsanto’s desire to maximize the yield of its products,” says Carolina Eastern-Vail’s Love. “They have a lot invested in it. However, in trying to take control of the total process they could possibly start to push out a very important piece of what has made US agriculture so productive — the local dealer network working with the local grower.”
Echoing the sentiments of many retailers, he continues, “I do not believe it is in their best interest to circumvent the knowledge and expertise of the local agronomic consultants. Instead, I think it is an opportunity for Monsanto to work with the local dealer network and utilize the value that has been developed over the years.”
Larry Arndt, agronomy and sales and marketing team leader at MaxYield Cooperative, West Bend, IA, which carries its own line of seed and provides seed recommendations under its SciMax Solutions brand, says he knows first-hand how difficult it is to get growers to share data with suppliers. Monsanto’s offering will require growers to provide deep historical field, seed and yield data in order to formulate its recommendation package that the company is calling FieldScripts.
“There’s a very small segment of growers that want to dive right into their computer, compile and send their data to SciMax, or Monsanto, or WinField Solutions for its R7 program to get the recommendation each generates,” says Arndt. “There’s a bigger segment of growers that want someone to help them. I think Monsanto’s go-to-market strategy will change in the future, and continue to evolve until they get it right. But I don’t think it will happen in big steps.”
On the more optimistic side is Devin Mogler, vice president of agronomy operations for Farmers Cooperative (FC), Ames, IA. He thinks that IFS might be able to deliver some real value to growers who are trying to optimize ever acre’s productive capacity.
“We need to get down to managing every square foot,” says Mogler, “and along with variable-rate fertilizer, variable-rate variety planting is key in this process. Precision Planting offers some good products and systems for this, and IFS will integrate it. This could help our overall precision effort. This will all translate into more bushels produced, and that will benefit the grain side of our business as well.”
CVA’s Hensley is approaching things more cautiously. His company is working with WinField Solutions and Monsanto on the pilot program, and he’s a bit concerned about having a supplier as involved as Monsanto. “I hope that we don’t have our blinders on and allow things to happen, and then find ourselves in a situation where our role is diminished,” says Hensley. “We are very aware of how it’s working right up front — I am a firm believer that we need to own the relationship with the grower locally. If you give that up, it’s a bad situation.”
On the more deeply skeptical end of the continuum is Jeff Eggleston, general manager at Hintzsche Fertilizer, Maple Park, IL. Hintzsche sells both Asgrow and DeKalb brands, has more than seven years of experience in creating variable-rate seeding recommendations, and works with well-known firm Premier Crop Consulting to build the recommendations for its YieldMaster program. The challenge he sees is what Monsanto is requiring retailers to do as administrators of the IFS FieldScripts program.
“Monsanto has good traits and varieties, but I do not think they fully understand what it takes for a retailer to employ the right people and effectively sell seed to the grower,” says Eggleston. “I know what they want and I know we can do it, but the profitability picture is still in question.”
To say the least, all retail eyes will be on Monsanto and its IFS efforts in 2013.
As retailers work to combat increasing resistance problems, Bill Hubbell, general manager at Wilco-Winfield, Mt. Angel, OR, probably summarizes most companies’ efforts now: “We’re working to better understand the classes of chemistry available and recommending a more complete rotation using a wider range of products.” Water conditioning agents and quality surfactants are also helping to help maximize post emergent herbicide sprays. But tailoring such multi-faceted strategies takes valuable time — and staff education.
Herbert Woolsey, president of Woolsey Brothers, Vandalia, IL, says most of his customers’ Roundup Ready corn never even sees a Roundup application these days, but rather, a conventional herbicide program that’s “the best we know how to buy for the money. I think that’s the trend,” he says. His region is facing glyphosate-resistant waterhemp problems.
Another strategy to manage herbicide resistance is emerging on the biotech front, the same industry that has given us amazing trait packages in corn and soybeans. (These hybrids are so good that many performed well in spite of this year’s drought: “We can grow corn in a parking lot,” marveled one MaxYield Coop customer.) Dicamba- and 2,4-D-tolerant crops are nearing the market, and while many of the dealers we talked with are interested, they’re also apprehensive about the new products. Woolsey says these herbicides are “known to wander” due to their volatility. He feels it will put a strain on dealers to know what other fields are adjacent to those with the tolerance.
Regulatory strains are also taxing retailers. As regulation of ag industries increases in some regions, Wilco-Winfield’s Hubbell would say he is not seeing as many new rules, as much as the increased focus around existing ones and figuring out how they should be interpreted locally is requiring even greater focus.
As one example, he points to requirements of the Clean Water Act and industrial stormwater run-off management prevention efforts. “Risk has gone up because private citizens and differing environmental groups have taken it on themselves to be the watchdogs,” he explains. Risk and liability have gone up as private citizens and groups have reached beyond governmental agency relationships.
In other regulatory challenges, Hubbell listed Homeland Security reporting, hazardous product and inventory management requirements, state specific label requirements, states’ varied label and RUP tracking enhancements as part of the growing compliance management task lists, and possible buffer zone rules.
In addition, he says that his grower-customers “are seeing a lot more visits from OHSA labor department officers concerning minimum wage compliance” than they used to.
“We’re but a $70 million company, and we yet have a full-time guy who spends approximately two-thirds of his time on clients’ compliance and reporting needs. It requires significant investment,” he says.
Carolina Eastern-Vail’s Love expects that in the next few years officials will implement a number of rules and regulations to protect the Chesapeake Bay Watershed. The far-reaching provisions will impact several areas of his business, and he says, “This will quickly become the ‘outside influencer’ on our whole ag market.”
MaxYield Cooperative’s Arndt simply says it’s a given that both EPA and state governments are going to get involved with nutrient management. MaxYield has developed SciMax Solutions, a trade secret nitrogen management program, that Arndt says is a great environmental protection tool because it can reduce nitrogen (N) application by at least 30 units per acre, yet yield is not affected.
He’s found that growers don’t want options to help produce more and more food limited by government. “Rather, retailers and local communities need to come together to take action to help nitrogen and phosphate issues in water,” he says.
Hintzsche’s Eggleston agreed that agriculture must do all it can to address nutrient management and usage. “If not, we are going to come under scrutiny and we will have regulations imposed upon us that will limit the amount of fertilizer we use due to nitrates and phosphorus in the river system,” he says. “We have an issue we will need to address.”
CVA’s Hensley says that the drought effects widely impacted Nebraska, and had not let up as of presstime for this report. It has served to open eyes to the need to manage the precious aquifers that kept corn alive this year.
“Concern going into this fall among growers was, is our water going to be regulated,” he says. “There has been a lot of talk about it — water management could be a larger deal than fertility management. We can’t keep drawing down the aquifer without replenishing it.”
On the fertility side, improving grower stewardship in the face of potential regulation is another key service CVA is providing, and growers have been very receptive. “We’ve been gauging what needs to be done on dryland, because there is a lot of concern about how much and what type of fertilizer is still out there following the drought,” says Hensley. “This has been a huge soil sampling fall for us, as we develop possible scenarios for growers to consider.”
Spray drift could also fall under regulatory challenges. Wilco-Winfield’s Hubbell believes regulators are trying to deal with the real problem as measured by science, but many communities are dealing with the perceived problem — which is very different. “We work with private aerial applicators that have either had to get more selective on where they will work, or are no longer in business,” he says. To combat drift in his own company, he says that 100% of its custom work is done with the inclusion of drift control, specifically Interlock.
In New York, Carolina Eastern-Vail’s Love says drift is always an issue, especially because not only are multiple different crops grown next to each other, often residential areas are located next to farmland.
In Iowa, FC’s Mogler says drift is also a big issue, one that his company is dealing with on multiple fronts, including increased training and “being smart” about when and where applicators spray. Says Jeff Tarsi, senior director of business strategy for Crop Production Services (CPS): “Sometimes it means having to say ‘no’ to a producer if conditions aren’t right for application.” Indeed, that can be painful, as Woolsey shares that many times his company has a lot of expensive equipment sitting on the lot because it’s better there than “out spraying when we shouldn’t be.”
Getting Precise, Creative With Fertility
Concerns are not limited to spray drift anymore either, says Hubbell. In his area, applications of lime are seeing more complaints about off-target drift.
Indeed, some dealers see more precise nutrient management gaining importance, especially in light of growing public attention on nitrogen movement. CPS’ Tarsi says his company is being more careful about product placement — and use of stabilizers and slow release items (polymer-coated) continues to grow in popularity with customers. “This approach will be valuable as regulations get more strict,” he believes.
Woolsey has a philosophy about fertilizer aids, emphasizing that he won’t use a product unless it helps with volatilization, denitrification, and leaching. He’s found the performance of NZone and Nutrisphere-N especially valuable the past two seasons because growers faced N losses due to wet springs.
Custom blends are becoming huge as retailers try to gauge and then supply the vast fertility needs of today’s powerhouse genetics. “Three hundred-bushel corn is asking for a whole lot more nutrients, a lot of different types of nutrients,” says MaxYield’s Arndt.
CVA’s Hensley says that micronutrients and fertilizer enhancements are definitely of interest to growers. “We have seen a huge influx of proprietary plant health products, things that promise to give growers that little edge,” he says. “Even basic manufacturers have offerings, like Dow AgroScience’s Instinct — there are a lot of products and opportunities out here, and we are looking very hard at them.” His own research is revealing some significant positives to using the products, adds Hensley.
“Timing and educations is very important when using these products, and we have hired on additional people as part of the investment to improve grower service,” Hensley adds.
Some dealers commented on how vital sulfur is becoming to their programs, with more ammonium sulfate going down and the growing use of specialty products such as the MicroEssentials line from Mosaic. The line includes MESZ, a micro-blend that includes sulfur and zinc. “Growers are demanding more and more of it and it has replaced a larger percentage of our total phosphate volume,” says FC’s Mogler. He’s seeing strong yields — and margins — with the product.
Like crop protection, fertilization is continuing to become more complex. Arndt sees the growing importance of feeding a crop consistently and continuously throughout the season: in the fall, in the spring, in the planter, at side dress time, and in foliar treatments. It’s no small task to figure out what product and how much of it should go on in each field.