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

Latest News
Tom Vilsack
CropLife 100USDA: Ag Retailers Posted Record Income, Revenues In 20…
October 7, 2015
Agriculture Secretary Tom Vilsack today announced that the nation’s farmer, rancher and fishery cooperatives posted record income and revenue in Read More
FungicidesNew Corn Disease Confirmed In Illinois
October 7, 2015
Symptomatic corn leaf samples from Champaign County, IL, have been confirmed positive for the bacterium Burkholderia andropogonis (Pseudomonas adropogonis (Smith) Read More
Crop InputsBASF Expands Production Capacities Of Biological Soluti…
October 7, 2015
With the opening of its expanded Littlehampton, UK production site, BASF is strengthening its ability to sustainably meet the growing Read More
Dupont Pioneer
Crop InputsIs A DuPont-Pioneer Split On The Horizon Following CEO&…
October 7, 2015
The abrupt departure of the top executive at chemical and seed giant DuPont has reignited the debate over whether the Read More
DTS10 Sprayer Hagie
SprayersHagie Introduces 2016 DTS10 Self-Propelled Sprayer
October 6, 2015
Hagie Mfg. has introduced to the market the newest and most innovative member of its product family, the 2016 DTS10. Read More
Industry NewsSimplot, Agrium Execs Added To TFI Board
October 6, 2015
The Fertilizer Institute (TFI) announced the election of Garrett Lofto, president of the agribusiness group at J.R. Simplot Co., to Read More
Corn Field
Management‘Land Grabbing’ Grows As Agricultural Resou…
October 6, 2015
Since 2000, more than 36 million hectares — an area about the size of Japan — has been purchased or Read More
Mahindra Implement
Industry NewsMahindra USA Expands West Coast Presence
October 6, 2015
To meet the growing demand for Mahindra products,  Mahindra USA is expanding its West Coast facility with the opening of Read More
Corn Stover Stubble
Crop InputsNew Microbial Product Unlocks Nutrients, Reduces Costly…
October 6, 2015
Trash, stover, residue — regardless of the term, postharvest debris is increasing and causing more frustration and detriment to overall soil Read More
Precision AgPurdue Releases 2015 Precision Ag Services Dealership S…
October 5, 2015
In the spring of 2015, CropLife magazine and the Departments of Agricultural Economics and Agronomy at Purdue University conducted the Read More
Monsanto Sign
Eric SfiligojMonsanto And Syngenta: Stonewall Street
October 5, 2015
Recently, I was taking part in an industry-related golf tournament and happened to find a lost golf ball sporting a Read More
Greg Musson, Gar Tootelian
StewardshipGar Tootelian, Inc.: Making A Difference In ‘The Valle…
October 5, 2015
For the Environmental Respect Awards program, sponsored by DuPont Crop Protection with assistance from CropLife® and FCI magazines, the Ambassador Read More
Fiberglass Tank Workers at Precision Tank & Equipment
EquipmentPrecision Tank & Equipment: 50 Years Of Growing
October 4, 2015
Looking out onto the production floor of the fiberglass/stainless steel tank manufacturing facility in Ligonier, IN, David Hemming, president/CEO for Read More
Syngenta Sign
Crop InputsScience & Strategy Spur Syngenta’s Crop Protection …
October 3, 2015
Developing a crop protection portfolio is a lot of science and a little serendipity. “There are a number of things Read More
Dan Schaefer and Jason Solberg IFCA
StewardshipIllinois Fertilizer & Chemical Association: Tacklin…
October 2, 2015
You’ve got to be doing something right if lots of people keep coming to you for advice. That’s what’s happening Read More
LegislationFall Fertilizer Transportation Could Be At Risk With Po…
October 1, 2015
Failure by Congress to extend the deadline for the implementation of Positive Train Control (PTC) on the railroads could gridlock Read More
Weed ResistancePPO Resistant Pigweed Hits The Mid-South
October 1, 2015
If you’re a soybean grower already entangled in troublesome weed resistance in the state of Arkansas, Mississippi or Tennessee, you Read More
Weed ResistanceManagement Strategies That Worked In 2015
October 1, 2015
For better or worse, throughout many regions of the country 2015 provided the optimal growing season conditions for both crops, Read More