Report: Another Good Year For The Top 100 Ag Retailers

Call it a bit of delayed reaction. Overall, the numbers weren’t terrible for ag retailers in 2013. But things were certainly slower than they’ve been for the past few years.

Going back to the 2012 CropLife 100 survey, many respondents said that back-to-back uneven weather seasons for agriculture hadn’t really impacted their overall bottom lines very much. Crop input and service sales remained brisk, with the entire marketplace seeing double-digit revenue gains despite lingering droughts and rain deluges.

However, another very wet spring during 2013 apparently did put a damper on the marketplace. According to 2013 CropLife 100 retailers, their overall revenue topped $29 billion for the year — another in a string of all-time sales highs going back to 2010. Despite this fact, the modest 4% increase in overall sales vs. 2012 was a far cry from the 15% and 17% jumps the nation’s top ag retailers recorded the prior two years.

And if you want to find the reason for this marketplace slowdown, look no further than the performance of the industry’s top crop input category, fertilizer. Since its overall downturn in 2008, the fertilizer category has been on a steady growth curve within the CropLife 100. A few years ago, this category surpassed crop protection to become the largest revenue generator for most ag retailers and its overall market share has climbed above 50%. In 2012, the fertilizer category hit an all-time revenue high of $15.2 billion — equal to 55% of all crop inputs/service sales — and seemed headed towards a 60% mark in 2013.

But this didn’t happen. Because of the dry fall in 2012 and wet spring in 2013, several ag retailers indicated on their CropLife 100 surveys that application work for fertilizer was severely limited compared with those in the previous years. As a result, fertilizer category sales in 2013 edged up only 0.7% to $15.3 billion. Since this rate of growth was far below the overall marketplace, the fertilizer category saw its market share dip 2% to 53%.

With the market’s lead crop input dog slowing down some in 2013, the next two categories — crop protection and seed — both regained some lost ground. For second place crop protection, 2013 turned out to be a very good year indeed, perhaps helped in part by the need for more crop protection product usage in the wet field conditions that existed throughout much of the nation during the spring and early summer. Overall, according to CropLife 100 ag retailers, sales in the crop protection products category surged ahead 8% during 2013, climbing from $7.9 billion in 2012 to $8.5 billion. More significantly, this revenue bump improved the category’s overall market share from 28% in 2012 to 29% in 2013. This marked the first market share increase the crop protection products category has experienced since the beginning of the 2000s.

Definitely Seed Money

If there was a category that performed in a completely opposite way from fertilizer, it was seed. At the start of the 2000s, the seed category was on the fast track when it came to market growth. Annually, the category gained sales and market share compared with the rest of the crop input/service categories.

Until 2011, that is. Beginning in that year, the seed category revenue among CropLife 100 retailers slowed down significantly, with annual double-digit gains falling into the low single-digit range. By the end of 2012, the seed category’s market share had dropped to 13%, down 2% from its 2010 high of 15%.

But in 2013, the seed category regained some of its lost form. For the year, said CropLife 100 survey respondents, seed sales increased 11%, topping $4 billion. As a result, market share for the category grew 1% to 14%.

As for the final of the major categories — custom application — 2013 was also a very good year. According to CropLife 100 retailers, their custom application revenues moved ahead 9% in 2013, topping $1.2 billion. This marked the second year in a row that the category has crossed the $1 billion threshold. Despite this gain, however, the market share for the custom application category stayed at 4%.

Leading Sectors

Besides tracking the major categories, the CropLife 100 survey also asks respondents to describe how their sales went in nine sub-sectors as well. For purposes of the survey, we ask retailers if their revenues in these sectors were up, down or flat compared with those from the prior year. In an average year, seven or eight of the nine tracked sectors have sales increases year-over-year for better than half of the respondents. In this sense, 2013 was average indeed. For the year, more than half of CropLife 100 retailers had sales upticks in eight out of the nine categories. Only traditional seed performed worse than this, with only 35% of respondents seeing an increase in sales in this sector.

Leading the way among these sectors was micronutrients. According to 82% of 2013 CropLife 100 survey respondents, their micronutrient sales grew 1% to more than 5% from 2012. Tied for second among the sectors were adjuvants and crop protection products, which were both up 1% to more than 5% in year-over-year sales for 80% of ag retailers in 2013. Most of the other sector sales for retailers were up in the low 60% to high 70% range (see graph for a more complete breakdown).

Looking ahead to 2014, CropLife 100 ag retailers continue to believe that agricultural fortunes will remain strong. When asked to rank their outlooks for 2014 on a scale of one to 10 (1 being low confidence, 10 being high confidence), 72% of respondents thought the coming year would rate between a seven and a nine. Another 25% believed 2014 would rate between a four and six on the revenue scale.

Grower-customers see things a bit differently, however. According to 2013 CropLife 100 ag retailers, only 68% of their grower-customers rate their outlook for 2014 as “cautiously optimistic.” The remaining 32% say their outlooks for agriculture in 2014 are “somewhat or very pessimistic.”

However, spending at the ag retail level should remain high, particularly when it comes to new construction. When asked how they would characterize their overall expenditure plans for 2014 vs. 2013, 81% of CropLife 100 respondents said their companies plan to spend more or the same amounts on construction and renovation as they did during 2013. Only 19% planned to spend less in this area.

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

Trending Articles

Green Valley Ag facility
Retail FacilitiesGreen Valley Ag Adopts A.J. Sackett’s Precision Fertilizer Blending® Technology At New Facility
July 8, 2014
Sackett's Precision Fertilizer Blending® Technology is making huge strides around the world. Green Valley Ag adopts the technology at its new facility to support its advancing agronomic needs. Read More
Retail FacilitiesWaconia Manufacturing Builds Facility Designed For Speed, Efficiency
July 7, 2014
To make its new hub facility more efficient, Cooperative Elevator enlisted the aid of Waconia Manufacturing. Read More
EquipmentSummer Show Preview 2014: Superior Sprayers Take The Field
July 3, 2014
In this final installment of our coverage of the major categories of Big IRON that retailers can expect to test-drive at this summer’s events, here is a look at 19 sprayers. Read More
Scouting a soybean patch at Green Valley Ag.
EmployeesCropLife Compensation Survey: Battling Talent Drain
July 2, 2014
Retailers too often lose employees to companies outside of agriculture, while recruiting efforts are most often limited to competitors and other ag-focused organizations. Read More
HerbicidesDow AgroSciences Introduces SureStart II Herbicide
June 16, 2014
The enhanced formulation has improved viscosity and increased stability under heat and controls more than 60 high-anxiety grasses and broadleaf weeds found in corn fields. Read More
HerbicidesBASF Investing $270 Million To Expand U.S. Herbicide Production
June 11, 2014
BASF has invested more than $270 million to expand herbicide production capacities in the U.S., including more than 20 new products to be launched over next two years. Read More

Latest News

StewardshipMonsanto Joins Panel Of Innovators To Advance Research …
July 30, 2014
Monsanto Co. and The Climate Corp., its division, recently joined a roundtable of experts at the White House to share ideas and research approaches to help the world’s farmers manage and adapt to the impact of climate change on the global food supply. Read More
Crop InputsSoybean Checkoff Produces Big ROI
July 30, 2014
Under the soy checkoff program, all U.S. soybean farmers contribute a small percentage of their gross soybean sales for research and marketing projects that maximize their profit potential. Read More
CropLife 100Learfield Sports, CHS Agree To Football-Centric, Colleg…
July 30, 2014
CHS Inc. will embark on a highly integrated collegiate sports sponsorship platform with 24 Division I universities in 19 states designed to reach the farmer-owned cooperative's rural owners and customers. Read More
LegislationUSDA Implements Key Farm Bill Crop Insurance Provision
July 30, 2014
The new Supplemental Coverage Option, available through the federal crop insurance program and set to begin with the 2015 crop year, is designed to help protect producers from yield and market volatility. Read More
CropLife 100Wilbur-Ellis Forms New Organizational Structure For Its…
July 30, 2014
The new structure will provide more responsive internal support and will allow regional vice presidents and area managers to spend more time with customers, on talent development and on operational excellence across branches. Read More
Palmer pigweed in cotton
HerbicidesNew Training Modules On Herbicide Resistance Now Availa…
July 30, 2014
The Weed Science Society of America has announced the availability of three new education modules on herbicide resistance in weeds. Read More
HerbicidesWillowood To Market Glufosinate
July 28, 2014
Willowood USA recently announced that Federal EPA has approved its technical registration for glufosinate. Read More
InsecticidesHow To Scout For Corn Earworms In Corn
July 28, 2014
In her weekly report, University of Missouri Agronomy Specialist Jill Scheidt discusses what to look for when scouting for corn earworm. Read More
Crop InputsDuPont Pioneer, Weyerhaeuser Enter Technology License A…
July 28, 2014
The agreement brings together agricultural and forestry know-how to sustainably improve crop productivity for corn growers around the world. Read More
EquipmentAGCO Launches Global iPad App
July 28, 2014
The free AGCO Global iPad App can be downloaded from the Apple iTunes Store and features the full family of RoGator self-propelled sprayers and TerraGator high-floatation spreaders. Read More
Eric SfiligojYuma Centennial Ag Supply Earns 2014 National Environme…
July 28, 2014
Colorado-based ag retailer receives top trophy in 24th annual DuPont Crop Protection/CropLife ceremony. Read More
CropLife 100Pinnacle Forms Alliance With Wildlife Managment, Seed O…
July 25, 2014
The strategic alliance will provide Tecomate with key wildlife products, processing facilities, distribution centers and sales through Pinnacle’s ever-growing retail network. Read More
ManagementFranken Presses White House On RFS Support
July 25, 2014
Al Franken and a group of Senate democrats recently met with senior White House official John Podesta to urge the administration to change its position on an EPA proposal. Read More
ManagementASA, FarmLink To Launch ‘Operation Benchmark̵…
July 25, 2014
The American Soybean Association (ASA) and FarmLink are teaming up to help farmers close the $11 billion gap between what they harvested in 2013 and what they could harvest annually. Read More
StewardshipNorthey: Farmers Commit $1.4 Million to Try New Water Q…
July 25, 2014
The practices that are eligible for funding include cover crops, no-till or strip till and using a nitrification inhibitor when applying fall fertilizer. Read More
Precision AgFarmers Learn How Changing World Will Impact Iowa
July 24, 2014
Technology and understanding global consumer demand for Iowa farm products brought hundreds of farmers and agribusiness leaders to Ames recently for the annual Iowa Farm Bureau Federation Economic Summit. Read More
HerbicidesPurdue: Late Season Weeds May Require Manual Removal
July 24, 2014
Hand-rouging and pulling late season weeds by hand may be the best way to remove them, more so than using a herbicide, a Purdue Extension weed scientist says. Read More
Soybean Field
InsecticidesTransform WG, Closer SC Insecticides Receive R&D 10…
July 23, 2014
Dow AgroSciences has received the award from R&D Magazine for Transform WG insecticide and Closer SC insecticide with Isoclast active. Read More