CropLife 100: Custom Application Report

It’s been giddy times for Big Iron these past two years. During 2007 and 2008, respondents in the annual CropLife 100 ag retailers survey indicated that their custom application revenues were up, grower-customers were spending money, and fungicide application work was helping to expand application options. Needless to say, everyone was very content with how this part of their business was rolling along.

Then the industry hit a serious speed bump toward the end of 2008. High fertilizer prices coupled with dropping commodity values put up a serious stop sign for growth. This was followed by an extremely wet spring season, with crop plantings in some parts of the country stretching almost to the start of summer.

• CropLife 100 Charts: New Sprayer Purchases | Top Sprayer Brands

Given these developments, it probably will surprise no one that overall custom application revenues were down in 2009. According to data compiled from CropLife® magazine’s annual CropLife 100 retailers survey, custom application sales declined 9% to $763 million. Even more telling, in the 2008 CropLife 100 survey, 71% of respondents said their custom application business grew 1% to 5% for the year, with only 6% experiencing a 1% to 5% decline. In 2009, the percentage of ag retailers seeing 1% to 5% growth for their custom application business dropped to 49%. Furthermore, almost one-third of respondents said this portion of their operation had a sales decline of 1% to 5%.

Less Fungicide Profit

To understand why this drop took place, you need to look no further than fungicide application. As the use of fungicide application as a preventive against disease began to take off during 2007 and 2008, ag retailers were reaping some significant rewards. In 2008, for example, 86% of the retailers polled in the CropLife 100 survey indicated this part of their custom application business was providing a “significant profit potential” for them.

During 2009, however, this percentage took a major hit, dropping to only 9% seeing a profit. Instead, 28% now say fungicide applications in 2009 made them less profits vs. the prior year. Another 53% of those polled said this part of their business was flat.

All the 2009 marketplace street lights weren’t red for custom application, however. Conventional wisdom among market analysts has always been that precision agriculture practices would perform well in a down year because of their inherent ability to target crop input use and save grower-customers money.

This apparently panned out. For 2009, said CropLife 100 respondents, site-specific revenues increased from $145.2 million in 2008 to $164.9 million, a jump of 14%. Despite this fact, only 43% of ag retailers surveyed said precision agriculture sales were up 1% to 5% for their operations, down 10% from the 2008 total of 53%.

Machine Wars

On the self-propelled sprayer side of the picture, AGCO brands (including Ag-Chem and Spra-Coupe) continue to be the most popular models in CropLife 100 ag retail fleets. For 2009, respondents said 75% of their sprayers were painted in the company’s distinctly yellow hue. This represented a slight decline from the prior year, where Ag-Chem RoGators tended to make up approximately 80% of existing sprayer fleets.

Coming in second among sprayer models were ones sporting John Deere green at 67%. Again, this percentage marked a slight drop (5%) from 2008’s 71% figure.

The news was much brighter for red sprayers in 2009. According to figures from the CropLife 100 survey, 57% of ag retailer units were provided by Case IH. This represented a significant 7% increase from the 2008 total of 50%.

But the biggest mover in percentage among sprayers in 2009 belonged to Hagie Manufacturing. In 2008, only 12% of CropLife 100 ag retailers had Hagie yellow sprayers in their grower-customers’ fields. In 2009, this figure more than doubled to 25%.

For the other two major sprayer manufacturers — GVM and Miller-St. Nazianz — 2009 was a year of opposites. Whereas the percentage of GVM sprayers in CropLife 100 fleets dropped 1% to 17%, the number of Miller sprayers increased 6% to 13%.

Still, the most scary news for ag sprayer makers comes not from how many units are currently in the nation’s ag retail fleets, but how few might be joining them in 2010. For the past several years, the CropLife 100 survey has asked respondents to say which company sprayers they were planning to purchase in the coming year. Normally, the top end of this group falls within the high 40% range. This year, however, the highest percentage of planned purchases was 38%, being recorded by both AGCO and Case units. Another 33% said they plan to buy sprayers made by John Deere in 2010.

Significantly, the number of ag retailers planning to forego any sprayer purchase in the new year has expanded. In a normal year, perhaps one in five respondents say their company isn’t planning equipment buys in the year ahead. In 2009, however, this percentage jumped to 33%. In other words, approximately one in three retailers don’t plan to purchase new sprayers in 2010.

Leave a Reply

CropLife 100 Stories

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
CropLife 100CHS To Acquire Illinois River Energy Ethanol Plant
May 1, 2014
CHS has signed an agreement with Sinav Ltd. to acquire 100% of the company's stock, which includes Illinois River Energy, a 133-million-gallon-per-year ethanol plant at Rochelle, IL. Read More

Trending Articles

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
HerbicidesScouting Key To Next Season’s Soybean Herbicide Program
August 12, 2014
When growing soybeans, growers need to think ahead to stay one step ahead of weeds. That means examining weed threats and evaluating which herbicides work best. Read More
StewardshipMichigan Agriculture Leaders On Toledo Water Ban: We Want To Be Part Of The Conversation
August 8, 2014
Leaders of Michigan agricultural organizations said Thursday that the government should not have a “knee-jerk reaction” based on last weekend’s water ban in Toledo due to fertilizer run-off in Lake Erie. 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
Eric SfiligojThe Resurgence Of Crop Protection
August 4, 2014
Plenty of new offerings over the next few years should see a rebirth for the crop protection products category in terms of market share. Read More

Latest News

CropLife 100Two Iowa-Based Ag Co-ops To Merge
August 27, 2014
The Board of Directors and management of United Western Coop, Missouri Valley, IA has completed a merger with Heartland Co-op, West Des Moines, IA, effective September 1, 2014. Read More
FertilizerKoch Expands AGROTAIN Nitrogen Stabilizer Portfolio
August 26, 2014
Koch Agronomic Services, LLC has added two new innovative nitrogen stabilizers to the AGROTAIN product family – AGROTAIN ADVANCED and AGROTAIN DRI-­MAXX. Read More
Seed/BiotechDuPont To Build Two Seed Treatment Centers
August 26, 2014
DuPont has announced construction on two state-of-the-art centers dedicated to developing and testing seed treatment formulations, applications and seed handling techniques in an important step toward bringing new solutions to growers. Read More
Seed/BiotechLoveland Products Acquires A Controlling Interest In Ag…
August 26, 2014
Loveland Products, a subsidiary of Agrium , has announced the company has acquired a controlling interest in Agricen, a Dallas-area agricultural biotechnology company delivering biochemical-based products for efficient and sustainable plant nutrition. Read More
StewardshipUp Close Look At The 2014 Environmental Respect Award W…
August 25, 2014
The 2014 Environmental Respect Award winners were honored recently at the 24th annual event in Wilmington, DE. Read More
Eric SfiligojAg Science Rejection Carries Consequences
August 25, 2014
As innuendo and fear dog the regulatory process, agriculture can’t get the new tools it needs to combat world hunger. Read More
LegislationFarmers Dismayed As New Farm Bill Dumps Direct Payments
August 25, 2014
The threatened end of cash subsidies to the nation’s row crop farmers dates back through at least the last two iterations of national agriculture policy legislation. 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
CropLife 100GROWMARK CEO To Retire
August 22, 2014
GROWMARK chief executive officer Jeff Solberg has announced his retirement effective September 15, 2014. Read More
InsecticidesDuPont’s Prevathon Approved For Dry Beans
August 22, 2014
DuPont Prevathon insect control powered by Rynaxypyr has received EPA registration for foliar use on dry bean crops, including dried shelled peas and beans. Read More
ManagementNCGA DuPont New Leaders Program Enters Sophmore Season
August 20, 2014
The National Corn Growers Association and DuPont are pleased to announce the second year of the NCGA DuPont New Leaders Program. Read More
FungicidesVerdesian Links Up With Mitsui, Hokusan
August 20, 2014
Mitsui Chemicals Agro, Inc., and Hokusan Co., announced the signing of an exclusive licensing agreement allowing Verdesian Life Sciences global access to its patented technology for suppressing mycotoxin contamination in wheat and barley. Read More
SprayersUniversity Of Illinois Introduces New Spray App
August 18, 2014
University of Illinois Extension has released a new smartphone app for making sprayer-related calculations. Pesticide Spray Calculator, or Spray Calc, Read More
Crop InputsSyngenta Names New Manager Of Federal Government Relati…
August 18, 2014
Laura Wood Peterson has joined Syngenta as manager of federal government relations, based in Washington, DC. Read More
ManagementExpert To Discuss Farmland Value, Rent At Farm Science …
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
EquipmentDeere Announces Factory Layoffs
August 18, 2014
Deere & Co. has announced it will reduce the size of its manufacturing workforce at some agricultural equipment factories in response to current market demand for its products. Read More
HerbicidesNew DuPont Afforia Herbicide Gives Crops A Clean Start
August 18, 2014
DuPont Afforia is a preplant herbicide for soybeans and other field crops that provides excellent burndown and residual control of many challenging weeds, such as marestail and waterhemp. Read More
Equipment21 Products Showcased At MAGIE 2014
August 18, 2014
The annual Midwest AG Industries Exposition is upon us. Here is CropLife IRON's look at some of the products visitors can expect to see at this week's event. Read More