State Of Ag Retail In 2011: Up

Corn stalks

Boy, what a difference a few years has made for the world of agriculture. In 2009, when we first began this comprehensive look at the marketplace, agriculture was in a state of shock. As the global economic environment went south, commodity prices followed, as did crop input prices. By the end of the year, with virtually no fertilizer sold during the fall, ag retailers took millions of dollars in inventory write-downs, which severely depressed the industry’s 2009 numbers.

By contrast, 2011 is shaping up to tell a completely different story. According to information gathered in the CropLife 100 ag retailers survey, overall revenue for this group grew 17% to more than $24 billion. Better still, the four major sources of this income — fertilizer, crop protection products, seed and custom application work — also saw increases.

“If you back up to one year ago, we had an incredible fall because of the outstanding weather, and for the most part, it sure felt like in fertilizer, we were in a position to cannibalize a fair amount of spring application,” says Jim Howe, vice president for Star of the West Milling, Frankenmuth, MI. “We did lose a bit of spring, but as it turned out, we were on par with expectations.”

The Profit Question

Of course, while volume numbers were a big improvement from the past few years, profits were still sometimes hard to come by. “That’s been a tougher part of this business lately,” says Harlan Asmus, president of Asmus Farm Supply. “For many dealers I know, their sales were up in the 20% range, but their overall profits ended up dropping approximately 1%.”

According to Asmus and other retailers, part of the reason for this is the intense competition that is beginning to cater to the grower community. In fact, some retailers said that their facilities were the only brick-and-mortar structures servicing their areas in direct competition to a host of small shops that just sell products to “a couple of guys selling products from the back of a pick-up truck.”

And, according to Craig Childs, senior vice president of agri services at MFA, Columbia, MO, this situation is likely to be more pronounced in the coming years. “When there’s money in the farmers’ hands, it seems like there’s more people there wanting to get it from them,” says Childs.

Of course, with the overall happiness in the marketplace right now, there are some observers who have wondered aloud if the industry is setting itself up for another crash effort a la 2008. However, Star of the West Milling’s Howe doesn’t think that history will end up repeating itself in 2012.

“There’s a lot of concern about whether we would experience another 2008,” he says. “The key difference is that back then, we as an industry were all expecting prices to climb and had fully stocked our warehouses, and manufacturers were also overstocked. Now, fertilizer warehouses are experiencing shortages. In 2008, we all built up inventories in hopes of hitting a home run. And we got washed out instead.”

Leave a Reply

One comment on “State Of Ag Retail In 2011: Up

  1. I think to curb the guys selling out of a pickup box there should be license requirement for a fee. Maybe other retailers have a better idea.

State of the Industry Stories

Fertilizer Tender close-up
MicronutrientsHow Micronutrients Fit Into 2017 Fertility Plans
January 10, 2017
Where do micronutrients stand going forward in fertility plans? For one thing, Tim Mundorf, Field Representative with Midwest Laboratories, says Read More
Fertilizer application
State of the IndustryCautious Optimism On Fertilizer In 2017
January 10, 2017
What kind of fertilizer rates are growers and retailers looking at in 2017 and beyond? According to stakeholders CropLife magazine Read More
Asmus Farm Supply crop protection products in storage
State of the IndustryCrop Protection Products Market: Complexity Begets Opportunity
January 10, 2017
While other key market segments in agriculture continue to see tumultuous shifts in sales volumes going forward (large equipment sales are Read More
Pioneer corn seed in storage
Special ReportsState Of The Seed Industry: Better Later Than Never
January 3, 2017
Traditionally, the majority of the nation’s grower-customers made their seed planting decisions in the late fall. Normally, when folks attended Read More
Trending Articles
AdjuvantsA New Weed-Control Era Begins: But First, One Last Obstacle
March 4, 2017
There is trepidation, there is reluctance, and there is excitement. Ag retailers feel it all about the new dicamba and Read More
LIFT Academy video screenshot
Crop InputsLIFT Agriculture Academy: A Q&A With West Central Distribution’s Dean Hendrickson
March 1, 2017
West Central Distribution recently launched its LIFT Agriculture Academy, a new, premiere training and professional development resource for West Central’s ag Read More
Farmer and aptop
Matt Hopkins10 Warning Signs Your Website Is Grossly Outdated
February 8, 2017
Your Website is often a visitor’s first impression of your ag retail business. A positive first impression can set the Read More
AgriSync
Matt Hopkins17 Agriculture Apps That Will Help You Farm Smarter In 2017
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
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
Latest News
UncategorizedPrecision Ag, Iowa Water, and GM Corn Updates
March 24, 2017
Editors Paul Schrimpf and Eric Sfiligoj look at the state of precision agriculture, the dismissal of the Des Moines Water Read More
Pam Marrone
Crop InputsMarrone Bio Innovations Enters Biostimulants Market Wit…
March 23, 2017
Marrone Bio Innovations, Inc. is expanding beyond biopesticides and crop protection and into the biostimulant market by commercially launching Haven Read More
Nutrients for Life Foundation Teacher
FertilizerNutrients For Life Foundation Celebrates 10 Years Teach…
March 23, 2017
Those in agriculture know fertilizer is a vital ingredient to grow strong, productive crops. In fact, fertilizer is responsible for Read More
ManagementThink You Know Water? Take WinField United’s R…
March 22, 2017
Water is among our most precious resources, and arguably the hardest working, with just one percent available for human use, Read More
Corn Field
LegislationTFI Hopes Court Dismissal Is ‘Final Chapter’…
March 20, 2017
The Fertilizer Institute (TFI) released the following statement from President, Chris Jahn on the March 17, 2017, federal court dismissal Read More
Wheat Growers
Industry NewsWheat Growers CEO Dale Locken To Retire
March 20, 2017
CEO Dale Locken has announced that he plans to retire from Wheat Growers. Locken has served almost 15 years as Read More
Bayer Monsanto
Eric SfiligojBayer-Monsanto: Life, LibertyLink, And The Pursuit Of R…
March 20, 2017
As the calendar officially turns to spring, life is in full renewal mode. Flowers are blooming, birds are singing, and Read More
Corn Field
Crop InputsUltra Yield Micronutrients Acquires Kronos Micronutrien…
March 16, 2017
Ultra Yield Micronutrients, Inc. ”Ultra”, an affiliate of Cameron Chemicals, Inc., is pleased to announce that it has acquired the Read More
ManagementSnowstorms, Asset Sales, and Soybeans Prices
March 16, 2017
Editors Paul Schrimpf and Eric Sfiligoj discuss the weather, precision ag, crop protection company mergers, and commodity prices in this Read More
Soybean Field
Seed/BiotechBayer Invests $8.1 million In Soybean Advancement In Th…
March 16, 2017
Growers in Illinois and across the Midwest now have the added benefit of a state-of-the-art soybean research facility, increasing accessibility Read More
CHS
CropLife 100CHS Acquires Western Co-op Transport Association
March 16, 2017
CHS Inc., North America’s leading farmer-owned cooperative and a global energy, grains and foods company, has purchased Western Co-op Transport Read More
Young corn plants in soil
HerbicidesBest Management Practices To Control PPO-Resistant Weed…
March 14, 2017
Weeds resistant to the class of herbicides called protoporphyrinogen oxidase (PPO) inhibitors are spreading at a faster rate than weed Read More
Photo credit: The United Soybean Board/The Soybean Checkoff.
Eric SfiligojFungicide Resistance On The Horizon
March 13, 2017
For many years now, the agricultural market has struggled to keep ahead of an ever-growing number of herbicide-resistant weeds. According Read More
Management2017 Commodity Classic Review
March 10, 2017
Editors Paul Schrimpf and Eric Sfiligoj discuss what happened at the recent Commodity Classic in San Antonio. Read More
Farmer using AgriSync
ManagementMajor AgriSync Update Aims To Extend Ag Experts’ Power …
March 10, 2017
AgriSync announced a major update to its leading collaboration and service management tool for professional ag advisors and their farmer Read More
Agrible Pocket Spray Smart App
EquipmentNew Agrible Pocket Spray Smart App Alleviates Spraying …
March 10, 2017
There’s a new app to help farmers decide when to spray their fields. Pocket Spray Smart is a free iOS Read More
BPIA logo
Crop InputsBiological Products Trade Association Changes Name, Exp…
March 9, 2017
The Biological Products Industry Alliance (BPIA), formerly the BioPesticide Industry Alliance, is the new name of the rapidly growing U.S.-based Read More
BBI MagnaSpread Salford BBI
Equipment14 Fertilizer Spreaders For 2017
March 9, 2017
Application equipment manufacturers stressed flexibility and accuracy with this year’s crop of fertilizer spreaders. From AGCO’s TerraGator TG9300B and Case IH’s 810 Read More