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

Trending Articles

Crop InputsPlatform Specialty Products To Acquire Arysta LifeScience
October 20, 2014
Once the acquisition is complete, Platform Specialty Products will combine Arysta LifeScience with previously acquired companies Agriphar and Chemtura Crop Solutions. Read More
Seed/BiotechMonsanto Offers New Support For Ferguson, Area Communities
October 8, 2014
Monsanto Co. has committed $1 million in new support for several collaborative efforts in Ferguson, MO, and surrounding communities in North St. Louis County. Read More
Seed/BiotechUnapproved Genetically Modified Wheat Found In Montana
October 3, 2014
USDA reports that one year after discovery of Monsanto's unapproved wheat in a single Oregon field disrupted U.S. wheat export sales, the GMO wheat has again been found in Montana. Read More
Equipment2014 Product Of The Year Voting
September 19, 2014
The deadline to vote for the 2014 CropLife IRON Product of the Year is October 31. Please cast your vote today to help us determine the winner. Read More
FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More
CropLife 100CHS To Build $3 Billion Fertilizer Plant In North Dakota
September 5, 2014
The fertilizer plant in Spiritwood will be the single largest investment in CHS history, as well as the single largest private investment project ever undertaken in North Dakota. Read More

Latest News

CropLife 100GROWMARK Announces Appointments In Plant Food Division
October 22, 2014
GROWMARK, Inc. has announced the three key staff changes in its Plant Food Division. Read More
CropLife 100GROWMARK Appoints New VP Of Finance And Risk Management
October 22, 2014
Wade Mittelstadt has been named GROWMARK Vice President, Financial and Risk Mangement, effective December 1, 2014. Read More
FungicidesEPA Approves BASF In-Furrow Corn Fungicide
October 22, 2014
Field trials show Xanthion In-furrow fungicide provides more rapid emergence, extended residual control and improved seedling health than untreated crops. Read More
EquipmentAgraScout App Available At No Cost To Universities
October 21, 2014
AgraScout, a fast and easy to use mobile crop scouting app, is now available at no cost to University students, Read More
LegislationNew Farm Bill Program To Provide Relief To Farmers Affe…
October 21, 2014
The USDA has implemented a new Farm Bill initiative that will provide relief to farmers affected by severe weather, including drought. Read More
ManagementGreenfield Scholars Program Aims To Sustain Agronomy Wo…
October 21, 2014
The program encourages talented students to study agronomy, crop and soil sciences while cultivating networks to develop the necessary workforce to sustain the profession. Read More
Paul SchrimpfPrecision Ag: Taking It To The Hill
October 21, 2014
A new coalition took the good news message of precision agriculture to Washington, DC, last month. Read More
ManagementUSDA Awards $18 Million In Small Business Research Gran…
October 21, 2014
The grants will provide high quality, advanced research and development that will lead to technological innovations and solutions for American agriculture. Read More
FertilizerCF Industries Terminates Merger Discussions With Yara I…
October 21, 2014
CF Industries Holdings and Yara International have terminated their discussions regarding a potential merger of equals transaction. Read More
Seed/BiotechSyngenta Ranked A Top 10 Biotech Employer For Third tim…
October 20, 2014
Syngenta ranked in the top 10 among the world’s top biotech employers, according to an annual survey conducted by Science magazine. Read More
CropLife 100Wheat Growers Break Ground For New Facility At Kennebec
October 20, 2014
Wheat Growers has broke ground for a state-of-the-art shuttle loader grain handling, fertilizer and agronomy facility in Kennebec, SD. Read More
FertilizerVerdesian Life Sciences Signs Agreement With Los Alamos…
October 20, 2014
Verdesian Life Sciences has signed a licensing agreement with Los Alamos National Laboratory to develop and market LANL’s latest nitrogen enhancement technology for plants. Read More
MicronutrientsStoller Group Announces Groundbreaking At New Office Bu…
October 20, 2014
Jerry Stoller, founder and president of Stoller Group, announced the groundbreaking at the site of the company’s future headquarters in Read More
Crop InputsBioSafe Systems Opens New Production Facility In Nevada
October 20, 2014
BioSafe Systems has completed construction of a state-of-art production facility in Sparks, NV, for its line of activated peroxygen products. Read More
Crop InputsPlatform Specialty Products To Acquire Arysta LifeScien…
October 20, 2014
Once the acquisition is complete, Platform Specialty Products will combine Arysta LifeScience with previously acquired companies Agriphar and Chemtura Crop Solutions. Read More
Seed/BiotechEPA Approves Dow’s Enlist Duo Herbicide
October 15, 2014
The Enlist Weed Control System, breakthrough technology to fight resistant and tough weeds, has received the long-awaited green light from federal regulatory authorities. Read More
MicronutrientsGypsum On Farms Could Help Keep Water Clean, Not Green
October 14, 2014
Gypsum, which has roots in the past as a farm soil treatment, also may have a bright future, and not just as a booster of crops but also as a protector of water. Read More
Photo credit: The United Soybean Board/The Soybean Checkoff.
Crop InputsVerdesian Grows Sales Staff
October 14, 2014
The new account managers will drive sales growth and support relationships with key customers in the plant nutrition and seed treatment and inoculants product categories. Read More