CropLife 100: A Serious Comeback

Going into 2010, most everyone in the ag retail marketplace had nothing but questions. Following two very, very turbulent years in 2008 and 2009, virtually no one was confident enough to predict where the industry might be headed at the start of the second decade of the 21st century. Indeed, at the 2009 CropLife State of the Industry roundtable discussion, held during the annual Agricultural Retailers Association meeting, most retailers on the panel said essentially the same thing when asked what 2010 might be like for sales: “I wish I knew.”

Now, one year later, we all know. Fortunately, the answer is a good one. In fact, based purely upon the numbers, 2010 was a great year for ag retailers, one of the best on record. According to CropLife 100 retailers, total market revenue hit an all-time high during 2010, topping out at just over $20.6 billion. Not only is this figure up significantly from 2009’s $18.9 billion (plus 9%), but it is 8% higher than the industry’s previous high-water mark of $19.1 billion, accomplished during 2008 before the fertilizer/ethanol/commodity price crash began to negatively impact ag retailer numbers.

To appreciate just how well the industry did in 2010, consider how the four market categories tracked in the CropLife 100 survey — fertilizer, crop protection, seed and custom application — performed. In most years, a few of these are up in revenues while others are down. On rare occasions such as in 2007 and 2008, all four recorded gains. In 2009, three of the four took revenue hits, with only the seed category showing any kind of market growth.

• Charts: Market Share (2010 vs. 2000) | Profit Level (2010 vs. 2009)

In this sense, 2010 was much more like 2007 and 2008. All four categories had sales gains, ranging from plus 3% for crop protection products to plus 18% for custom application services.

Of course, the big dog among the crop inputs/services categories is fertilizer. During 2009, fertilizer application work virtually halted during the fall season, which caused overall sales to plunge 3% to $9.2 billion. Obviously, retailers were hopeful that once fertilizer prices stabilized, grower-customers would once again begin applying crop nutrients to their crops and soils.

And they did. In 2010, according to the survey data, fertilizer sales grew a healthy 10% to 10.1 billion. This gain helped the category maintain its total crop inputs/services market share at 49%. If market conditions remain stable next year, expect fertilizer to represent half of all CropLife 100 member sales by the time we compile our 2011 CropLife 100 report.

Inputs/Services Doing Better

Six of the nine sub-categories tracked by the CropLife 100 survey saw sales gains for more than half of member companies in 2010.

Item Up Flat Down

Seed Treatment

77%

21%

2%

Adjuvants

70%

18%

12%

Biotech Seed

68%

27%

5%

Custom Application

56%

27%

17%

Micronutrients

55%

25%

20%

Precision Ag

51%

40%

9%

Crop Protection

47%

10%

43%

Fertilizer

44%

14%

42%

Traditional Seed

27%

47%

26%

Among the sub-categories, seed treatment performed best, outdistancing perennial leader biotech seed by a good margin. (Base = 86)

 For the second largest category, crop protection products, the news was more mixed in 2010. On the plus side, the category did see revenue increase $200 million to $6.6 billion. Unfortunately, this 3% increase didn’t keep pace with the other three market categories. Therefore, the market share for crop protection took another hit, down 2% to 32%. Put into historical context, this means that the crop protection category’s market share has fallen 16% since the beginning of the 21st century.

Seed Money

As has been the case for the past several years, crop protection’s loss has translated into seed’s gain. During 2009, the seed category was the only one to show market growth, with sales up 18% to $2.6 billion. This moved forward another 15% during 2010 according to the CropLife 100 retailers survey. For the year, seed revenues topped out at just shy of $3 billion. The seed category now holds a 15% market share among crop inputs/services, up 2% from 2009 and almost double from the start of the century.

In terms of total market gain, the custom application category was the big winner during 2010. In 2009, this category took a 9% revenue hit, dropping from $837 million in 2008 to $763 million. Going into the year, many ag retailers were worried that increased competition, in part from larger grower-customers, could keep overall growth from taking place.

Instead, custom application work did just fine. According to the survey data, custom application/precision ag service sales came in just short of $900 million, up 18% from 2009. This boost helped the category maintain its 4% market share.

A Real Treatment

If things returned to a state of normal for the major crop input/service categories tracked by the CropLife 100 survey in 2010, that wasn’t the case across the board. For several years, the survey has asked ag retailers to describe their revenues in nine sub-categories — adjuvants, biotech seed, crop protection, custom application, fertilizer, micronutrients, precision ag, seed treatment and traditional seed. For each of these items, the survey asks retailers to tell us if their sales for the year were up 1% to 5%, down 1% to 5% or flat.

Since CropLife® began tracking this information, biotech seed has always lead the other sub-categories in terms of positive sales growth. Normally, this segment has increased year-after-year revenues ranging from a low of 69% in 2009 to high of 84% in 2006.

But in 2010, however, the bloom fell off the biotech seed rose somewhat. For the year, only 68% of CropLife 100 retailers recorded a sales increase for this sub-category, which ranked third among the nine items tracked. Furthermore, 5% of respondents said their biotech seed sales in 2010 fell.

With biotech seed stumbling somewhat, seed treatments climbed to the head of the pack. For this sub-category, 77% of CropLife 100 retailers had sales increases during 2010, up 11% from 2009. Better still, only 2% saw revenue declines in this area of their business.

Among the other sub-categories, four more joined seed treatments and biotech seed in being up for more than half of CropLife 100 retailers in 2010. These were adjuvants, up for 70% of respondents; custom application, up for 56%; micronutrients, up for 55%; and precision ag, up for 51%.

Then there were the three sub-categories that didn’t weather the revenue storm too well during 2010. Performing the worst was traditional seed, which typically is up for less than one in five retailers in a given calendar year. In 2010, the sub-category did slightly better, with sales improvement recorded among 27% of respondents. However, another 26% wrote that their traditional seed sales were off 1% to 5% during the year.

Fertilizer also took some sales lumps in 2010. For this sub-category, 44% of respondents saw sales improvement of 1% to 5%, while an almost equal percentage (42%) had revenue declines ranging from 1% to 5%.

It was a similar story for crop protection. For this sub-category, 47% of ag retailers responding to the CropLife 100 survey recorded some kind of revenue gain. But 43% had sales declines. This was a far cry from the crop protection sub-category’s performance in 2009, when 64% of respondents had sales increases and only 24% were down.


CropLife magazine would like to thank all the CropLife 100 retailers for helping make this report possible. We appreciate your time spent filling out our annual survey form.

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