Ag Retail Consolidation Sees Uptick in 2024
November 20, 2024 On November 19, the board of West Central Ag Services, a long-time member of the CropLife 100 based in Minnesota, endorsed the acceptance of an acquisition offer from CHS for $225 million. The final decision on whether to formally join CHS now goes to West Central Ag Services members for a vote on November 26.
If this deal is approved, West Central Ag Services – which ranked at No. 31 on the 2023 CropLife 100 with sales between $151 million and $200 million – would become part of CHS’ vast ag retail family, which spreads across 16 states and contains more than 260 outlets.
This also continues a trend which has picked up steam over the past year – large, successful ag retailers joining forces to stay relevant in today’s challenging agricultural environment. Indeed, several former CropLife 100 ag retailers went down this path between 2023 and 2024, including Panhandle Cooperative (merging with Farmers Cooperative) and Wickman Chemical (selling its assets to Landus Cooperative).
Now, truthfully, this is not a new trend. For the past decade or so, ag retailers have merged with or acquired rival ag retailers in their territories with regularity. Back in the mid-2010s, companies did this to maintain/strengthen their market presence and stay relevant to their grower-customers, particularly among cooperatives.
Loading ...For example, consider the story of Sunrise Cooperative, which merged its operations with Trupointe Cooperative back in 2016. “We were both coming off really strong financial years,” George Secor, Sunrise President/CEO told CropLife in an early 2017 interview. “At the same time, I kept telling our board that with what was going on across the agricultural space, the decks could easily get re-shuffled, and we could suffer as a company.”
In the agricultural world of 2024, these same factors still apply. Furthermore, after some record setting revenue years for grower-customers during 2022 and 2023, net farm income for 2024 is projected to decline 4.4%, to $140 billion. And the outlook for 2025 remains equally uncertain at present, according to experts.
Hence, these are just some of the reasons CHS and West Central Ag Services will soon formally join forces. And agricultural watchers can expect more such mergers to take place in 2025 as well.
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