The Color Purple

As the marketplace gears up for the 2010 spring season, it seems as if the industry is dividing up into two distinct camps when it comes to predicting how the year will play out. Saying this is “black or white” sounds too cliché. So, in honor of how political pundits describe the national divide these days, I will label these camps the Red and the Blue.

In the Red Camp, everyone is angry. These individuals have watched their healthy profit margins from 2007 evaporate and, in some cases, turn into a sea of red ink on their 2008 and 2009 balance sheets. Red campers are angry that the good times of the mid-2000s didn’t last (and that they were unprepared for the crash in fertilizer inventories vs. prices).

But by the same token, individuals in the Red Camp are convinced 2010 will be a harbinger of better days ahead. Grower-customers who favor corn have spent the better part of the past two seasons “mining” their soils for crop nutrients without putting down needed items such as phosphate (P) and potassium (K). “If they want to maintain the record yields from 2009, they will have to start buying P and K again,” say Red campers. Along with improved fertilizer sales, Red campers believe other crop inputs will follow a similar growth curve and the industry will return to its profitable ways, a la 2007.

Meanwhile, in the Blue Camp, individuals are deeply depressed, or blue, in their outlook. These retailers are looking at the market in a completely different light, with most convinced the down times of 2008 and 2009 will usher in an age of depressed profit margins, lower input usage, and more custom application work being done by grower-customers themselves. “Now that growers have maintained high yields without doing as much work, they will be satisfied to sit back and wait until things get desperate before making a purchase,” say Blue campers.

What do I think? Truthfully, I can see both sides being right in some ways. In that sense, color me purple.

I believe Red campers are right when they think things have to improve in 2010. But the bar is so low compared with the performances of 2008 and 2009, this shouldn’t be hard to accomplish. On the flip side, Blue campers are probably right that growers will be much more reluctant to spend money than ever before.

Viewing things from a purple perspective, 2010 will probably be a “one step forward, one step back” kind of year. Retailers will see increased fertilizer profits, with formal contracts locking in deals far in advance of delivery. However, with record harvest numbers for the 2009 crop, commodity prices have already dipped, meaning grower-customers will be watching every penny they need to spend throughout the year. Credit will be available for some companies, but others will struggle to find banks willing to back them.

All this means is that the industry will have plenty of Red and Blue stories to tell in 2010. But the overall market performance will probably be colored a middle-of-road purple in the end.

Leave a Reply

Featured Stories
CropLife 100Pinnacle Expands Sanders Brand In The South
February 27, 2015
Pinnacle has acquired Hopkins Seed and Chemical in Qulin, MO, which expands the company's Sanders brand to nine Southern states. Read More
Crop InputsWinField Unveiling NutriVision Technology, Ascend Dry Formulation
February 24, 2015
New for 2015 are NutriVision Technology, a unique tool for monitoring in-season plant nutrient availability, and Ascend WSG plant growth regulator, a new dry formulation of Ascend plant growth regulator. Read More
Crop InputsVilsack To Deliver Commodity Classic Keynote Address
February 19, 2015
The secretary will deliver a keynote address to several thousand farmers and ag allies during the event's General Session, to be held Friday, February 27, in Phoenix, AZ. Read More
Ribbon cutting at 2015 National Farm Machinery Show
Matt Hopkins5 Key Takeaways From The 2015 National Farm Machinery Show
February 14, 2015
Celebrating its 50th anniversary, the largest indoor farm show in the country didn't disappoint with the latest in technology and trends on full display. Read More
Top 100 Articles
Wheat Growers, North Central Farmers Elevator Pursue Merger
CropLife 100Wheat Growers, North Central Farmers Elevator Pursue Merger
March 3, 2015
Two CropLife 100 retailers — South Dakota Wheat Growers (ranked No. 11) and North Central Farmers Elevator (No. 19) — have entered into a Letter of Intent to unify the two companies into a newly named cooperative. Read More
Growmark Group
CropLife 100GROWMARK In 2015: Back, To The Future
March 2, 2015
The nation’s third largest ag retail organization is simultaneously moving forward while remembering its past. Read More
CropLife 100Pinnacle Expands Sanders Brand In The South
February 27, 2015
Pinnacle has acquired Hopkins Seed and Chemical in Qulin, MO, which expands the company's Sanders brand to nine Southern states. Read More
CropLife 100Pinnacle Launches New Providence Agriculture Location In Indiana
February 27, 2015
Pinnacle Agriculture Holdings — ranked No. 6 on the CropLife 100 — has established a new retail location in New Castle, IN, which will operate as part of Pinnacle's Providence Agriculture brand. Read More
CropLife 100Cooperative CHS Returns $518 Million To Owners
February 23, 2015
The 2015 cash return to owners is based on CHS net income of $1.1 billion, the company's second highest on record. Read More
corn field
CropLife 100The Andersons’ Humic DG Now Available In Canada
February 13, 2015
The Andersons, Inc. Turf & Specialty Group has announced its Humic DG product is now available to customers in the Canadian turf, agriculture and horticulture markets. Read More
Latest News
ManagementKey Takeaways From Commodity Classic Event
March 6, 2015
Editors Paul Schrimpf and Eric Sfiligoj debrief on their experience at the 20th annual Commodity Classic conference and tradeshow last Read More
Training
SoftwareFulfilling A Training Need
March 6, 2015
Tri Ag and CSE Software hope to introduce a new hands-on simulator for custom applicator tudoring. Read More
RR2X soybeans surround untreated check (center)
Industry NewsArysta Hires New Midwest Territory Sales Manager
March 5, 2015
Arysta LifeScience North America recently named Jonathan “Jon” Tone as the Territory Sales Manager in the Midwest sales region. Read More
Fertilizer360 Yield Center: Try These 5 Steps To Fine Tune Nitrog…
March 5, 2015
Yield Center 360 advises that an effective nitrogen management plan needs to focus on how much N a particular field and corn crop needs, as well as how to properly manage N throughout the growing season — with adjustments along the way. Read More
Precision AgFarmobile Coming Online In 2015
March 5, 2015
A new startup is looking to make collecting and selling ag data a more rewarding proposition for growers. Read More
Crop InputsCommodity Classic 2015 Sets Attendance High Mark
March 4, 2015
With nearly 8,000 total attendees, the 2015 Commodity Classic convention and trade show, which took place last week in Phoenix, AZ, shattered previous records for the landmark event, Read More
Young corn plants
FertilizerNew Nitrogen Stabilizer From Simplot Protects Fertilize…
March 4, 2015
By using OmniPierce Technology, Eclipse-N from Simplot Grower Solutions coats and protects more nitrogen, increasing nitrogen efficiency and decreasing loss due to volatilization. Read More
Industry NewsOhio Corn And Wheat Growers Association, Ohio Soybean A…
March 4, 2015
The associations truly appreciate the comprehensive approach and diligent work that the Ohio House of Representatives has dedicated to addressing water quality and House Bill 61. Read More
Mahindra Implement
Industry NewsMahindra USA Aligns With Paladin Attachment For Impleme…
March 4, 2015
Mahindra USA will begin utilizing Paladin Attachments as its implement supplier in April 2015. Read More
Crop InputsValent BioSciences Acquires Mycorrhizal Applications
March 4, 2015
The acquisition adds another strategic platform to VBC’s rapidly expanding global biorational business, providing additional tools for the Biorational Window platform being developed with its parent, Sumitomo Chemical Co., Ltd. Read More
Nutrients for Life Foundation - Plant Nutrient on the Farm Station
Industry NewsNutrients For Life Foundation Launches New Station Prog…
March 4, 2015
This ready-to-implement station provides an interactive opportunity for farms to showcase crop nutrients’ important role in growing healthy crops. Read More
Adjuvants loading
AdjuvantsAdjuvants Continue Upward Trend
March 4, 2015
A dizzying array of developments in crop protection technologies promise to make specialty adjuvants a crucial piece of the puzzle going forward. Read More
Wheat Growers, North Central Farmers Elevator Pursue Merger
CropLife 100Wheat Growers, North Central Farmers Elevator Pursue Me…
March 3, 2015
Two CropLife 100 retailers — South Dakota Wheat Growers (ranked No. 11) and North Central Farmers Elevator (No. 19) — have entered into a Letter of Intent to unify the two companies into a newly named cooperative. Read More
10 Tips for Spring Planter Preparation
Equipment10 Tips For Spring Planter Preparation
March 3, 2015
Kinze Manufacturing offers advice on how to ensure your planter is ready before you hit the field. Read More
Industry NewsOABA 2015 LAUNCH Program Recognizes 20 New Graduates
March 3, 2015
Twenty Ohio agribusiness leaders are being recognized as the latest graduates of Ohio AgriBusiness Association’s LAUNCH program. Read More
EquipmentNew AGCO Website Helps Customers Shop For Certified Pre…
March 3, 2015
RoGator sprayers are among the wide range of CPO equipment available through AGCO's site. Read More
Enlist spray Demo
HerbicidesGuiding New Herbicide Systems’ Launches
March 3, 2015
Under careful watch, the new 2,4-D- and dicamba-tolerant crops hit more acres this season. Read More
Eric SfiligojCommodity Classic 2015: Playing The Waiting Game
March 2, 2015
There was plenty of future-talk at this year’s event as companies (and growers) are largely in a holding pattern of sorts. Read More