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
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
Top 100 Articles
Wheat Growers, North Central Farmers Elevator Pursue Merger
CropLife 100Wheat Growers, North Central Farmers Elevator Pursue Merger
March 3, 2015
Two CropLife 100 retailers — South Dakota Wheat Growers (ranked No. 11) and North Central Farmers Elevator (No. 19) — have entered into a Letter of Intent to unify the two companies into a newly named cooperative. Read More
Growmark Group
CropLife 100GROWMARK In 2015: Back, To The Future
March 2, 2015
The nation’s third largest ag retail organization is simultaneously moving forward while remembering its past. Read More
CropLife 100Pinnacle Expands Sanders Brand In The South
February 27, 2015
Pinnacle has acquired Hopkins Seed and Chemical in Qulin, MO, which expands the company's Sanders brand to nine Southern states. Read More
CropLife 100Pinnacle Launches New Providence Agriculture Location In Indiana
February 27, 2015
Pinnacle Agriculture Holdings — ranked No. 6 on the CropLife 100 — has established a new retail location in New Castle, IN, which will operate as part of Pinnacle's Providence Agriculture brand. Read More
CropLife 100Cooperative CHS Returns $518 Million To Owners
February 23, 2015
The 2015 cash return to owners is based on CHS net income of $1.1 billion, the company's second highest on record. Read More
corn field
CropLife 100The Andersons’ Humic DG Now Available In Canada
February 13, 2015
The Andersons, Inc. Turf & Specialty Group has announced its Humic DG product is now available to customers in the Canadian turf, agriculture and horticulture markets. Read More
Latest News
RR2X soybeans surround untreated check (center)
Industry NewsArysta Hires New Midwest Territory Sales Manager
March 5, 2015
Arysta LifeScience North America recently named Jonathan “Jon” Tone as the Territory Sales Manager in the Midwest sales region. Read More
Fertilizer360 Yield Center: Try These 5 Steps To Fine Tune Nitrog…
March 5, 2015
Yield Center 360 advises that an effective nitrogen management plan needs to focus on how much N a particular field and corn crop needs, as well as how to properly manage N throughout the growing season — with adjustments along the way. Read More
Precision AgFarmobile Coming Online In 2015
March 5, 2015
A new startup is looking to make collecting and selling ag data a more rewarding proposition for growers. Read More
Crop InputsCommodity Classic 2015 Sets Attendance High Mark
March 4, 2015
With nearly 8,000 total attendees, the 2015 Commodity Classic convention and trade show, which took place last week in Phoenix, AZ, shattered previous records for the landmark event, Read More
Young corn plants
FertilizerNew Nitrogen Stabilizer From Simplot Protects Fertilize…
March 4, 2015
By using OmniPierce Technology, Eclipse-N from Simplot Grower Solutions coats and protects more nitrogen, increasing nitrogen efficiency and decreasing loss due to volatilization. Read More
Industry NewsOhio Corn And Wheat Growers Association, Ohio Soybean A…
March 4, 2015
The associations truly appreciate the comprehensive approach and diligent work that the Ohio House of Representatives has dedicated to addressing water quality and House Bill 61. Read More
Mahindra Implement
Industry NewsMahindra USA Aligns With Paladin Attachment For Impleme…
March 4, 2015
Mahindra USA will begin utilizing Paladin Attachments as its implement supplier in April 2015. Read More
Crop InputsValent BioSciences Acquires Mycorrhizal Applications
March 4, 2015
The acquisition adds another strategic platform to VBC’s rapidly expanding global biorational business, providing additional tools for the Biorational Window platform being developed with its parent, Sumitomo Chemical Co., Ltd. Read More
Nutrients for Life Foundation - Plant Nutrient on the Farm Station
Industry NewsNutrients For Life Foundation Launches New Station Prog…
March 4, 2015
This ready-to-implement station provides an interactive opportunity for farms to showcase crop nutrients’ important role in growing healthy crops. Read More
Adjuvants loading
AdjuvantsAdjuvants Continue Upward Trend
March 4, 2015
A dizzying array of developments in crop protection technologies promise to make specialty adjuvants a crucial piece of the puzzle going forward. Read More
Wheat Growers, North Central Farmers Elevator Pursue Merger
CropLife 100Wheat Growers, North Central Farmers Elevator Pursue Me…
March 3, 2015
Two CropLife 100 retailers — South Dakota Wheat Growers (ranked No. 11) and North Central Farmers Elevator (No. 19) — have entered into a Letter of Intent to unify the two companies into a newly named cooperative. Read More
10 Tips for Spring Planter Preparation
Equipment10 Tips For Spring Planter Preparation
March 3, 2015
Kinze Manufacturing offers advice on how to ensure your planter is ready before you hit the field. Read More
Industry NewsOABA 2015 LAUNCH Program Recognizes 20 New Graduates
March 3, 2015
Twenty Ohio agribusiness leaders are being recognized as the latest graduates of Ohio AgriBusiness Association’s LAUNCH program. Read More
EquipmentNew AGCO Website Helps Customers Shop For Certified Pre…
March 3, 2015
RoGator sprayers are among the wide range of CPO equipment available through AGCO's site. Read More
Enlist spray Demo
HerbicidesGuiding New Herbicide Systems’ Launches
March 3, 2015
Under careful watch, the new 2,4-D- and dicamba-tolerant crops hit more acres this season. Read More
Eric SfiligojCommodity Classic 2015: Playing The Waiting Game
March 2, 2015
There was plenty of future-talk at this year’s event as companies (and growers) are largely in a holding pattern of sorts. Read More
Industry NewsHighway Equipment Appoints New Director Of Business Dev…
March 2, 2015
Cory Venable, who joined Highway Equipment Company (HECO) in 2013 as OEM Account Manager, has been promoted to Director of Business Development. Read More
Prairieland FS employees
Eric SfiligojWorkforce Worries
March 2, 2015
Finding good employees almost always ranks as the No. 1 or No. 2 problem for ag retailers in our annual CropLife 100 survey. Read More