Ag Retailers See 20% Fertilizer Revenue Growth In 2012

Here’s a fun riddle — what does the fertilizer category during 2012 have in common with a Nerf ball? Answer: Both are quick to return to their original state no matter how hard you squeeze them.

According to the 2012 CropLife 100 ag retailers survey, the fertilizer category had an exceptional year. Already the market share leader among all crop inputs/services, retailers recorded fertilizer sales of $15.2 billion during 2012, an impressive 19.7% higher than they had in 2011. Furthermore, fertilizer has increased its overall market share of all revenues among CropLife 100 retailers to 55%, up 2% from the 53% market share the category held in 2011.

By all measures, 2012 was a very strong year for the fertilizer category. And to many observers, this is sure to be something of a surprise, especially given how the marketplace mood towards crop nutrients was playing out a few months back. As most everyone will recall, the late spring and early summer of 2012 put severe pressure on grower-customers and their crops. For the better part of four months, more than half of the Continental U.S. was in the midst of a major rain shortfall. Particularly hard hit were the major corn producing states of Indiana and Illinois (in the South of the state) and portions of the Deep South such as Central Georgia and Northern Arkansas. Likewise, major wheat producing areas of Western Kansas and Oklahoma saw little to no rainfall. As a result, many crops were left to wilt in the field with growers choosing to cash in on crop insurance rather than try to save crops that had no chance to come to harvest.

Early Worries …

Naturally, this “abandoned” field approach had many ag retailers concerned that some of their grower-customers would simply forego all fertilizer application work during the autumn months as a result of the drought. “I’m sitting in the San Antonio airport to return from the meeting, and the drought and its impact was a major discussion point here,” wrote Tim McArdle, COO/vice president for BRANDT, Springfield, IL, while coming home from mid-July’s Southwestern Fertilizer Confer­ence. “The crops in Central Illinois are hurt badly. The average yield will, at best, be one-half, with many fields in the 0- to 50-bushel range.”

Some ag retailers experienced a drop in sales almost immediately. “We had a drop in summer fertilizer,” wrote Scott Firlus, CFO-COO for Wisconsin River Coop, Adams, WI, on one of the earliest CropLife 100 forms to be returned to our offices.

Other ag retailers also were expecting the Drought of 2012 to have a similar impact on their fertilizer opportunities to hit their fertilizer bottom lines by harvest time. “We were on our way to being up 25%, but we will probably end up being up around 13% because of the drought,” wrote Kathleen Sims, president of Sims Fertilizer & Chemical, Osborne, KS.

Jim Shelton, COO for Pearl City Elevator, Inc., Lena, IL, echoed this view on his company’s CropLife 100 form. “Fall phosphate and potash application will be 60% of normal,” wrote Shelton.

… But Rebounding Nicely

Still, when the final numbers were tabulated from the 2012 CropLife 100 forms, the fertilizer category had its best sales years ever. Likewise, the sector’s overall market share is up and looks as if it will be approaching the 60% mark within the next year or two.

How did this happen? In a word, says Devin Mogler, vice president, agronomy operations for Farmers Cooperative Co., Ames, IA, money. The past few years, with commodity prices staying near record highs for much of the time and grower-customer incomes on the upswing, there was less reluctance on the part of this group to spend the money needed to keep their fields fertilized, despite how this year’s crops ended up performing.

“Yields on corn in our area have been disappointing, coming in between 25% and 75% of normal,” said Mogler. “Soybean yields are slightly off also, but the producers still have a lot of income to offset these losses. So we ended up seeing only slight reductions in fertilizer application thus far this fall.”

So despite being squeezed by a reduced crop base and drier than normal conditions in many fields, the fertilizer category still kept its robust shape during 2012, just like a Nerf ball. Naturally, the question must be asked then — if 2012 couldn’t dampen the fertilizer category’s fortunes among CropLife 100 retailers, can anything?

According to Dave Coppess, executive vice president, sales & marketing for Heartland Co-op, West Des Moines, IA, it’s possible in 2013 — particularly if there is any kind of “market hangover” from the Drought of 2012.

“Since many growers lost their crops and left them in the field in 2012, they might decide that the crop nutrients they applied for the year will be adequate to give them good yields going forward,” says Coppess. “So yes, there are some questions about fertility needs for the 2013 crop.”

Leave a Reply

CropLife 100 Stories

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
CropLife 100BRANDT Acquires Lemon Ag Services
August 4, 2014
The acquisition of Lemon Ag fits BRANDT’s aggressive corporate strategy of providing superior agronomic advice and services for customers in central Illinois. Read More
CropLife 100Wilbur-Ellis To Relocate Agribusiness Division To Denver
July 16, 2014
The move Eastward will allow Wilbur-Ellis’ Agribusiness Division to be more accessible to relevant geographies and is expected to enhance communication and collaboration among the division’s nearly 3,000 employees. Read More
CropLife 100Map: Pinnacle Agriculture Holdings Acquisitions In 2014
May 29, 2014
Pinnacle Agriculture Holdings continues to expand its agricultural retail distribution business through these key acquisitions in 2014. Read More

Trending Articles

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
EquipmentNew Holland Acquires Miller-St. Nazianz
September 3, 2014
The assets of Miller acquired as part of the transaction will become part of New Holland Agriculture, a CNH Industrial brand, building on a successful four-year partnership between the two companies. Read More
CropLife 100Pinnacle Acquires East Kansas Chemical
September 2, 2014
Ranked 82nd on the CropLife 100, East Kansas Chemical will operate as part of Pinnacle's Performance Agriculture brand. Read More
MAGIE 2014 ShowStopper
EquipmentJohn Deere Again Wins MAGIE ShowStopper Award
August 25, 2014
For the second consecutive year, John Deere was honored at the Midwest AG Industries Exposition (MAGIE) for its new R4045 sprayer. Read More
ManagementExpert To Discuss Farmland Value, Rent At Farm Science Review
August 18, 2014
While cropland values in Ohio increased in the past two years, they have remained flat in 2014, declining in some cases, according to an Ohio State University agricultural economist. Read More
EquipmentAdvance Your Technology IQ At MAGIE
August 13, 2014
The Midwest AG Industries Exposition (August 20-21) is the place you need to be to see, study and evaluate how new advances in the equipment, operations, crop protection and fertility sectors can help your business prosper. Read More

Latest News

CropLife 100Pinnacle Acquires Kansas-Based Cedar Ridge Supply
September 16, 2014
Cedar Ridge Supply will operate as part of Pinnacle's Performance Agriculture brand. Read More
StewardshipSecretary Vilsack Highlights Innovative Conservation Ef…
September 15, 2014
Nearly $16 million in Conservation Innovation Grants (CIGs) will be awarded to 47 organizations to help develop cutting-edge ideas to accelerate innovation in private lands conservation. Read More
Seed/BiotechSyngenta Responds To Cargill Lawsuit
September 15, 2014
Syngenta believes that the lawsuit is without merit and strongly upholds the right of growers to have access to approved new technologies. Read More
Equipment2014 Farm Science Review Launches Mobile App
September 15, 2014
Smartphone and tablet users planning on attending the 2014 Farm Science Review can now download this year’s customized mobile application. Read More
CropLife 100Southern States Coop Grower Sets Georgia Soybean Yield …
September 15, 2014
Georgia farmer Randy Dowdy's soybeans yielded an astonishing 110.66 bushels per acre, crushing the previous record of 82 bushels-per-acre. Read More
NIMITZ Treated vs Untreated pepper plant
InsecticidesNIMITZ Nematicide Approved By EPA
September 12, 2014
NIMITZ is a novel, non-fumigant nematicide with simplified application features, user safety and an active ingredient with a unique mode of action. Read More
InsecticidesMarrone Bio Innovations Receives Patent For Chromobacte…
September 11, 2014
The patent is the first step for MBI in developing a commercially viable product to inhibit infestations of corn rootworm larvae across America and other regions. Read More
HerbicidesDow AgroSciences: Keeping The Pipeline Stocked
September 11, 2014
Dow AgroSciences is embracing product diversity to drive the company’s future. Read More
CropLife 100CHS Is Official Partner Of New St. Paul Ballpark
September 10, 2014
The new ballpark in St. Paul, MN, officially became CHS Field with Twin Cities-based CHS Inc. revealed as the naming rights partner. Read More
EquipmentHagie Honors Farming Stewardship Leaders
September 10, 2014
The Iowa Farm Environmental Leader award recognizes Iowa farmers as environmental leaders that are committed to healthy soils and improved water quality. Read More
Precision AgPlantBeat: Your Plants’ Pulse In The Palm Of Your Han…
September 10, 2014
A new agronomic monitoring and recommendation service from Phytech could rewrite the book on real-time plant health status monitoring. Read More
StewardshipCCAs Making Headway With 4R Program In Lake Erie Wester…
September 9, 2014
Certified Crop Advisers are implementing the 4R Nutrient Stewardship Certification program in Lake Erie's Western Basin to improve water quality. Read More
MicronutrientsMicronutrients Going Macro
September 9, 2014
Between 2014’s fantastic growing conditions and a heightened awareness on plant nutrition, the major players in micronutrients are gearing up for another big year. Read More
Crop InputsFMC Announces Cheminova Takeover
September 8, 2014
FMC Corporation today announced that it has signed a definitive agreement to acquire Cheminova, a wholly owned subsidiary of Auriga Industries. Read More
HerbicidesValent’s Fierce XLT Herbicide Receives EPA Approv…
September 8, 2014
Valent U.S.A. Corp. announced today that Fierce XLT Soybean Herbicide is now federally registered for preemergence weed control in soybeans Read More
Eric SfiligojIndustry Consolidation Set To Increase Going Forward
September 8, 2014
As the agricultural marketplace moves into fall, one observer predicts the pace of consolidation will grow at all levels. Read More
LegislationCropLife America Leaders Address Regulatory Landscape, …
September 8, 2014
As CropLife America enters its 81st year, the organization’s leaders have seen another period of rapid and visible policy and public issue activity. 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