The Road Not Yet Taken

As an editor, I take immense pleasure in many of the projects I regularly work on. Perhaps my proudest achievement each year is compiling our magazine’s annual CropLife 100 report. After working for months crunching the numbers and reading through the returned survey forms from the nation’s top retailers, I love seeing the completed issue being figuratively devoured by readers, especially those at the annual Agricultural Retailers Association (ARA) meeting.

This past year was a bit different, however. Just as the issue was hitting the ARA show floor, the two largest members of the CropLife 100Agrium Retail and United Agri Products (UAP)  — announced plans to merge their operations. With one fell swoop, the newly released CropLife 100 had been reduced to the CropLife 99.

Now as much as having our CropLife 100 diminished by the news was disheartening, it had me wondering if this latest consolidation in the retail world wouldn’t lead to something bigger — perhaps industry altering. As I’ve stated in many previous columns, the industry I formerly covered, soft drinks, went through an endless rollercoaster of years with and years without consolidation throughout the decades. But once the major players The Coca-Cola Co. and PepsiCo started buying during the late 1980s, consolidation became a virtual tidal wave, sweeping away many long-time companies in the process.

Why do I think 2008 might be the pivotal year for ag retailer consolidation? Consider these three factors:
1. The Agrium-UAP Domino Effect. Now that the nation’s top two retailers have announced plans to consolidate, other top retailers might want to do the same to keep pace. At the 2007 ARA show, buzzwords like “synergy” and “efficiency” were in abundance as other retailers talked about the Agrium-UAP deal. Also, when I joked about the fact that my CropLife 100 was now a CropLife 99, one large retailer representative smiled back at me and said: “If my company has anything to say about it, you could be down to a CropLife 98 or CropLife 97 before too long.”

2. The No Higher Value Effect. By all accounts, 2007 was an exceptional year for both ag retailers and their grower-customers. According to market observers, net grower income increased to a record $87.5 billion last year. Like­wise, CropLife 100 retailers took in inputs and services revenue of $14.7 billion. Basically, then, dealerships today are probably worth more than they ever will be. If some older owners are looking to “cash out and retire,” 2008 could be the ideal time to do so.

3. The Manufacturers Effect. A few months back, I speculated what might happen to retailer consolidation if manufacturers jumped whole-heartedly into the mix. At the time, most readers told me it wouldn’t happen. But according to several sources, there were two other potential buyers of UAP before Agrium stepped in — a basic crop protection company and a post-patent supplier. Even though they ultimately lost out on UAP, one or both could still be looking to add a retailer network to their company portfolio.

So it’s very possible that one or all of these factors will come into play during 2008 and push the ag retail industry down an entirely different road than it’s ever been on before. We’ll just have to wait and see …

Leave a Reply

Featured Stories

StewardshipResponsibleAg Begins Auditor Training
October 31, 2014
ResponsibleAg auditor training is now underway at the Ford B. West Center for Responsible Agriculture in Owensboro, KY. Read More
InsecticidesValent U.S.A., MGK Form Marketing Agreement
October 24, 2014
Valent has formed an agreement with Minneapolis-based MGK to manage the marketing and sales of MGK’s crop protection line of insect control products within the U.S. beginning April 1, 2015. Read More
FertilizerCF Industries Terminates Merger Discussions With Yara International
October 21, 2014
CF Industries Holdings and Yara International have terminated their discussions regarding a potential merger of equals transaction. Read More
StewardshipThree Ohio Ag Retailers Honored With 4R Certification
October 13, 2014
The 4R Nutrient Stewardship Certification Program has announced its first three agriculture nutrient service providers to achieve certified status. Read More

Trending Articles

InsecticidesNew Research Study Shows The Value Of Neonics
October 29, 2014
The study evaluated seed treatment, soil and foliar uses of neonicotinoid insecticides in the U.S. and Canada. Read More
Crop InputsPlatform Specialty Products To Acquire Arysta LifeScience
October 20, 2014
Once the acquisition is complete, Platform Specialty Products will combine Arysta LifeScience with previously acquired companies Agriphar and Chemtura Crop Solutions. Read More
Seed/BiotechMonsanto Offers New Support For Ferguson, Area Communities
October 8, 2014
Monsanto Co. has committed $1 million in new support for several collaborative efforts in Ferguson, MO, and surrounding communities in North St. Louis County. Read More
Seed/BiotechUnapproved Genetically Modified Wheat Found In Montana
October 3, 2014
USDA reports that one year after discovery of Monsanto's unapproved wheat in a single Oregon field disrupted U.S. wheat export sales, the GMO wheat has again been found in Montana. Read More
Equipment2014 Product Of The Year Voting
September 19, 2014
The deadline to vote for the 2014 CropLife IRON Product of the Year is October 31. Please cast your vote today to help us determine the winner. Read More
FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More

Latest News

StewardshipTFI Recognizes Michigan, Maryland Farms For 4R Stewards…
October 31, 2014
As farming practices increasingly attract interest from the general public, two farmers are ensuring they meet public approval. Read More
Eric SfiligojBig Brother Is Already Watching
October 31, 2014
Opponents to UAVs seem to think they could be used to spy on other people. But spying is already taking place, through the Internet. Read More
StewardshipAsmark Institute’s New Training Center Focused On…
October 31, 2014
The newly dedicated Ford B. West Center for Responsible Agriculture will be used as a national training and education center for professionals in the ag input industry. Read More
StewardshipCTIC Tour Dives Deep Into Everglades
October 31, 2014
The most recent Conservation In Action Tour (CTIC) hit South Florida recently to tour the Everglades Agricultural Area. Read More
StewardshipResponsibleAg Begins Auditor Training
October 31, 2014
ResponsibleAg auditor training is now underway at the Ford B. West Center for Responsible Agriculture in Owensboro, KY. Read More
CropLife 100ValueAct Buys Stake In Fertilizer Dealer Agrium
October 30, 2014
ValueAct has bought 8.2 million shares in Calgary, Alberta-based Agrium, making them the second largest investor in the fertilizer dealer. Read More
InsecticidesNew Research Study Shows The Value Of Neonics
October 29, 2014
The study evaluated seed treatment, soil and foliar uses of neonicotinoid insecticides in the U.S. and Canada. Read More
StewardshipUSDA To Provide $4 Million For Honey Bee Habitat
October 29, 2014
Agriculture Secretary Tom Vilsack announced today that more than $4 million in technical and financial assistance will be provided to Read More
Crop InputsValent Launches New Low VOC ProGibb LV Plus Plant Growt…
October 29, 2014
ProGibb LV Plus PGR is a high-potency, liquid gibberellic acid formulation designed to comply with California’s new air quality standards for high volatile organic compound agricultural products. Read More
Crop InputsBayer CropScience Acquires Certain DuPont Crop Protecti…
October 29, 2014
Bayer CropScience and DuPont Crop Protection have signed an agreement for Bayer to purchase certain DuPont Crop Protection Land Management assets in the U.S., Canada, Mexico, Australia and New Zealand. Read More
ManagementWest Central Names New President
October 29, 2014
West Central’s board of directors have announced their unanimous decision to name Milan Kucerak President and CEO-elect following Jeff Stroburg’s retirement at the end of the fiscal year. Read More
InsecticidesValent U.S.A., MGK Form Marketing Agreement
October 24, 2014
Valent has formed an agreement with Minneapolis-based MGK to manage the marketing and sales of MGK’s crop protection line of insect control products within the U.S. beginning April 1, 2015. Read More
StewardshipFlorida’s 4R Advocate Keeps Improving
October 24, 2014
Florida farmer Alan Jones uses the 4R principles of nutrient stewardship as the core of his fertility program, which allows him to maximize production and keep costs in check. Read More
Seed/BiotechMonsanto Named One Of The World’s Best Multinational …
October 23, 2014
Monsanto ranked No. 8 in the world’s largest annual study of workplace excellence that identifies the top 25 best multinational companies in terms of workplace culture. Read More
Crop InputsArysta Hires Former Agri-Chem, CPS Employee For Delta S…
October 23, 2014
New Territory Sales Manager Mark Peel’s primary role will focus on working with growers regarding fungicides in Louisiana, Mississippi, Arkansas and Tennessee. Read More
CropLife 100GROWMARK Announces Appointments In Plant Food Division
October 22, 2014
GROWMARK, Inc. has announced the three key staff changes in its Plant Food Division. Read More
CropLife 100GROWMARK Appoints New VP Of Finance And Risk Management
October 22, 2014
Wade Mittelstadt has been named GROWMARK Vice President, Financial and Risk Mangement, effective December 1, 2014. Read More
FungicidesEPA Approves BASF In-Furrow Corn Fungicide
October 22, 2014
Field trials show Xanthion In-furrow fungicide provides more rapid emergence, extended residual control and improved seedling health than untreated crops. Read More