Reading Between The Lines

As a statistics junkie, I think De­cember is my favorite time of the year. This month, CropLife® has compiled information from our annual survey of retailers. Although putting together the articles and charts from this data that make up the bulk of this issue’s content is fun, reading through completed survey forms gives me invaluable insights into the inner workings of this industry.

Looking through this year’s forms, I was struck by just how profitable 2007 was for most ag retailers. Sales were up, percentages were high, and the overall answers to our survey questions were positive. On the surface, it was a great year to be in this business. And yet …

Reading between the lines a bit, I found indications of an underlying uneasiness among respondents. Sure, 2007 was a fantastic year, but could this positive trend carry over into 2008?

Part of this hint of worry probably stems from ag retailers remembering their history. Traditionally, huge sales “up” years are inevitably followed by “down” ones, if for no other reason than any kind of exceptional “market heat” is hard to maintain for very long. This year, the ethanol craze and move to corn provided this in spades. As one equipment manufacturer said to me recently: “I’m used to seeing a one-year boom followed by three-year busts.”

So to analyze this worry a little deeper, I turned to this year’s CropLife 100 forms for help. Here’s what I found:

Overall Sales Were Strong. For 2007, ag retailer revenues increased 8.9% to more than $14.7 billion. This represented an increase of $1.2 billion over the 2006 total. During an average year for Crop­Life 100 retailers, the annual sales gain is usually in the 2% to 3% range. On the downside, this kind of market growth will be hard to duplicate in 2008, unless conditions remain identical to 2007, which is unlikely.

Fertilizer Sales Were Incredible. Fer­tilizer was far and away the biggest crop input in dollars, up 13.6% to more than $6.7 billion. Even better, 96% of CropLife 100 retailers said their fertilizer revenues increased in 2007. Put into perspective, and using the 100 ranked companies as a guide, this means that only four retailers within the CropLife 100 didn’t have higher fertilizer sales this year. Again, this kind of overall growth might be difficult to keep going for two years in a row.

Equipment Sales Were Down. Ac­cord­ing to manufacturers, sales of self-propelled sprayers were down 7% to 8% for 2007, despite projections to the contrary. However, many observers believe that retailer spending could pick up once their grower-customers cash in on higher commodity prices this year. Still, almost one-quarter (24%) of CropLife 100 retailers say they have no plans to buy new equipment in 2008.

Less Corn Means More Crop Mix. While increased corn acreage drove the market in 2007, 2008 could be a different story. Most CropLife 100 retailers think corn acres will decline or stay flat, with other crops such as soybeans and wheat gaining ground.

Taken together — and reading between the lines — all four of these variables say 2008 will be a “normal” year for retailers compared with 2007. Then again, retailers have been profitable under these circumstances for many years, so there’s reason to believe the industry will keep some of the gains it made this year. Time will tell …

Leave a Reply

Featured Stories

CropLife 100CropLife 100: The Colors Of Custom Application
December 5, 2014
Although many color spray rigs are in the yards of the nation’s top ag retailers, the majority of them still come in only a few shades. Read More
EquipmentAGCO Names Idaho Custom Applicator As 2014 Operator of the Year
December 4, 2014
Praised for his quality work and strong customer relationships, Idaho professional farm applicator Brent Klein has been named by AGCO Application Equipment as 2014 Operator of the Year. Read More
EquipmentAGCO Announces Operator Of The Year Finalists
November 20, 2014
Four custom applicators have been selected by AGCO Application Equipment as finalists for 2014 Operator of the Year, an honor that recognizes them as being among the top professionals in their industry throughout North America. Read More
CropLife 100Pinnacle Ag Acquires Colorado Aerial Application Outlet
November 17, 2014
Ft. Lupton, CO-based Reck Aviation — a full-service chemical application company providing aerial crop applications of fertilizers and crop protection products — will operate as part of Pinnacle's AgOne Application Services brand. Read More

Top 100 Articles

CropLife 100CHS: Driving Momentum To Help Farmer-Owners Grow
December 11, 2014
CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, must capture new opportunities to Read More
CropLife 100BRANDT, Verdesian Ink Distribution Agreement
December 9, 2014
The agreement grants BRANDT the exclusive right to sell and market Verdesian’s patented Steric chemistry in the Turf and Ornamental and eastern U.S. ag markets under the BRANDT Reaction product line name. Read More
CropLife 100CropLife 100: The Colors Of Custom Application
December 5, 2014
Although many color spray rigs are in the yards of the nation’s top ag retailers, the majority of them still come in only a few shades. Read More
CropLife 100Pinnacle Invests In Meridian Agriculture Distribution
December 4, 2014
Meridian will provide retailers with supplier-branded products and numerous opportunities to differentiate themselves from their competitors. Read More
CropLife 100CropLife 100: Entering A New Seed Era
December 4, 2014
The seed category has been re-vitalized during the past few years, and more good news (and varieties) are headed the industry’s way in 2015. Read More
CropLife 100CropLife 100: The Depressed State Of Fertilizer
December 3, 2014
Following downright giddy growth earlier this decade, fertilizer sales have fallen back down to earth the past two years. Read More

Latest News

Seed/BiotechKaren Arthur Joins AgriThority As Seed Treatment Produc…
December 19, 2014
Prior to joining AgriThority, Arthur directed research and development programs, overseeing laboratory and field research, to build the Valent U.S.A. seed treatment portfolio. Read More
EquipmentJohn Deere To Sell Crop Insurance Business
December 19, 2014
Deere & Co. has reached a definitive agreement to sell its crop insurance business, subject to regulatory approval, to Farmers Mutual Hail Insurance Co. of Iowa. Read More
Crop InputsNufarm Fills Regulatory VP Position
December 18, 2014
Nufarm announced today that Rob Schwehr has been promoted to the position of Vice President of Innovation & Regulatory Affairs for Nufarm Americas. Read More
Seed/BiotechReport: China Approves Viptera Corn, U.S. Officials Awa…
December 17, 2014
Chinese authorities have informed some agriculture industry officials the government has approved U.S. imports of a type of genetically modified corn developed by Syngenta. Read More
FertilizerMonty’s Plant Food Brings In New Sales Rep
December 16, 2014
Monty's Plant Food Company has hired Warren Kearns as its newest Sales Representative for the South Carolina area. Read More
EquipmentHagie Wins 2014 CropLife IRON Product Of The Year Award
December 15, 2014
The self-propelled sprayer maker has a hit on its hands with the new STS Series model. Read More
Syngenta
Seed/BiotechSyngenta Sees China Approving Contentious GMO Corn Soon
December 15, 2014
Syngenta will make an announcement when it receives official documentation from China that Agrisure Viptera corn, known as MIR 162, has been cleared for import. Read More
Crop InputsVerdesian Life Sciences Names Vice President Of Communi…
December 15, 2014
Amy Bugg will oversee the execution of all promotional strategies for the corporate brand and the complete product portfolio. Read More
StewardshipFarmers, Retailers Attend 4R Certification 4U Workshop
December 15, 2014
More than 160 farmers and ag retailer attended the “4R Certification 4U” workshop December 12 to learn more about the 4Rs of nutrient stewardship, water quality research in the area and cost-sharing opportunities. Read More
Matt Hopkins10 Best New Agriculture Apps For 2015
December 15, 2014
These new agriculture apps are certain to help ag professionals do their jobs more efficiently in 2015 and beyond. Read More
ManagementARA Learnings, Retail Buying Intentions: Welcome To Cro…
December 12, 2014
This informal video program puts news and events effecting retailers into context, and features Editors Paul Schrimpf and Eric Sfiligoj. Read More
Seed/BiotechMonsanto Herbicide-Tolerant Technology Closer To Commer…
December 12, 2014
The final EIS moves Monsanto one step closer to the introduction of Bollgard II XtendFlex cotton and Roundup Ready 2 Xtend soybeans, paving the way to provide access to dicamba-tolerant soybeans and cotton. Read More
Seed/BiotechUSDA Issues Final Environmental Impact Statement On Her…
December 12, 2014
The USDA Animal and Plant Health Inspection Service (APHIS) is issuing a final environmental impact statement on varieties of cotton and soybeans that have been genetically engineered for resistance to several herbicides, including the one known as dicamba. Read More
CropLife 100CHS: Driving Momentum To Help Farmer-Owners Grow
December 11, 2014
CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, must capture new opportunities to Read More
LegislationARA Applauds CFATS Passage Prior To Holiday Adjournment
December 11, 2014
The streamlined bill provides a four-year authorization of the CFATS program and guidance to DHS on key issues of chemical facility security Read More
Seed/BiotechBayer CropScience’s ILeVO Approved By EPA
December 11, 2014
EPA has approved ILeVO, the only seed treatment that protects the root system against infections caused by the Sudden Death Syndrome fungus and has activity against dangerous nematodes. Read More
Biologicals in Emerging Markets Map.
Crop InputsBiocontrols Could Quadruple By 2025; Will Regulators Pl…
December 11, 2014
The European experience with GMOs offers caution — and a promise — for biologicals. Read More
Crop InputsBASF Donates $75,000 To Feeding America
December 10, 2014
The donation will support Feeding America’s National Produce Program, an initiative that helps with planning, transportation and logistics to ensure fresh produce deliveries to the 200 member food banks around the country. Read More