A Better Feeling

I have to admit – prior to attending this year’s Agricultural Retailers Association (ARA) meeting, I was very pessimistic about the prospects for 2010. After all, the ag industry has just suffered through one of its worst financial years since the early 1980s, with grower-customer income falling to $54 billion and ag retail sales down to $18.9 billion (among the nation’s CropLife 100 operations). Given these facts, and feedback from retailers during our magazine’s annual PACE meeting in mid-October, I expected the mood among ARA attendees to be grim at best.

But I was wrong. Talking with ag retailers at ARA, I got some surprisingly positive remarks about how the industry should play out next year. As a result of the late harvest in many parts of the country, retailers think commodity prices will begin rebounding in early 2010, potentially putting more money back into their grower-customers’ pockets compared with fall 2009 predictions. Others are hopeful this will translate into more spring fertilizer application work once February and March 2010 roll around, helped by lower crop nutrient input prices. Even machine manufacturers, who have seen their backlog of orders cleared out and few new orders coming in, are anticipating a good year. “This lull has given us a chance to ship all the back orders and now we are gearing up for more reasonable delivery windows in 2010,” said one manufacturer.

This feeling was reinforced by participants in CropLife’s first ever State of the Industry roundtable, held on Tuesday, Dec. 1. An informal panel discussion among seven key retail representatives from all regions of the country, roundtable members agreed that 2009 would be best remembered as “being over” and were looking at 2010 to be a more normal year for ag retailers, akin to 2007 in profit and input activity. Rather than pulling in their resources and waiting for definite signs of a turnaround, most were moving ahead with aggressive programs to spur input and service growth.

“We plan to grow profits and retain our key stuff members in 2010,” said one panelist. “We as a company are investing the money needed to improve the quality of the information we can deliver to our grower-customers in the field,” said another.

Following all the negativity that dominated the industry during late 2008 and the whole of 2009, this feeling of hope is certainly a welcome change.

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