Rockwood Ag Services Pins Its Future Success on Its Past Legacy

Editor’s note: In recognizing 40 years of the CropLife 100 ag retail ranking program, our editors will engage with numerous CropLife 100 ag retailers at the National, Co-op, and Independent levels and unearth opportunities and concerns in today’s modern agricultural market. We will also feature numerous stories throughout the year focusing on ag retailers that are celebrating milestones, exploring how they have managed to survive and thrive where others have not. The first is this focus on one of the newest members of the CropLife 100, Rockwood Ag Services.

In business, company mergers and acquisitions don’t always yield the most desirable results. However, on occasion, the sum is truly better than the parts.

That’s the case with the newly formed Rockwood Ag Services, announced last September, which brought together Rockwood Chemical and Imperial Grain Growers, two independent ag retailers that have been a staple in California’s Imperial Valley.

Rockwood Chemical was founded in 1960 and since then has focused mostly on crop protection — herbicides, fungicides, and pesticides. Imperial Grain Grower, which celebrated its 100th anniversary last year, concentrated on sales and storage of grain and fertilizer.

The success of both companies over the decades was rooted in providing excellent service combined with a loyal customer base.

According to Victor Lopez, President of Rockwood Ag Services, the founders of Rockwood Chemical are still involved in the newly formed company either as shareholders or customers. That legacy and enduring commitment go a long way in the eyes of its customers and the local community.

“If you look at our shareholders and board members, they’re all very active in the community, from the farm bureau to the Rotary Club,” says Lopez.

It’s no surprise that large-sized ag retailers have made offers to buy the company over the years. But, the company has stayed true to its business model.

“We’re here to keep prices low for the farmers and to protect the farms,” says Don Emanuelli, Board Member at Rockwood Ag Services, “and we’ll do it with service, loyalty, and keeping our margins low in order to remain competitive in the market.”

Rockwood’s merger with Imperial Grain Growers was initiated, in part, to bring fertilizer into the portfolio.

Indeed, Lopez’s extensive experience in the fertilizer market, and prior role at chemical giant Yara, has helped Rockwood Ag Services become more competitive in the market, notes Emanuelli.

New Company, Historic Challenges

The strength and capabilities of the new company are being tested by some long-standing challenges.

In California, the number one issue for farmers is water. As of December 2022, the Imperial Valley was facing 10% cuts in water, which is roughly 250,000 acre-feet.

For some, 10% is a significant cut, while for others it may be more manageable, noted Lopez, “At least it’s not 25%,” he concedes.

Fortunately, Rockwood has done an excellent job when it comes to water conservation, adds Emanuelli.

“Over the last 10 years, our conservation efforts have allowed us to put back over a million acre-feet of water into the Colorado River,” he says.

However, with 10% cuts, “some guys won’t be able to make that because a lot of conservation was achieved with cheaper products, things that were less expensive,” explains Emanuelli.

“Now, if you start getting into drip irrigation, for example, that starts to get more expensive. It doesn’t pay for the water savings; not even close.”

Without government help, it’s likely that some farmers will have to fallow their land, which will lead to a lot of “heartburn” for a lot of people, he says. Some farmers will have to fallow 10% of their acreage, or even a lesser amount like 5% to 6%.

In any case, that reduction “is going to hurt everybody from the labor force to fertilizer companies, to grocery stores, and even the service industry, like insurance companies,” says Emanuelli.

Notwithstanding the persistent unknowns surrounding the water issue, ag retailers and their farmer customers are eternally optimistic.

“Farmers have to get their inputs ready. They need to put seed on the ground,” says Lopez. “Agriculture will still be here,” no matter how many acres will be fallowed.

“So, it’s up to ag retailers to really keep those costs in check for farmers and not take advantage of the situation,” he says.

In the meantime, regulations are a concern, adds Lopez. “Regulations are getting stricter and more programs are coming online — more compliance, more training.”

In order to stay ahead of regulatory requirements and add more value for customers, Rockwood Ag Services is implementing worker and product training programs.

“We provide training to the growers, and to their employees, as well. That’s part of the value that we’re bringing. As PCAs, we’re more in tune with what is needed and we’re able to offer that [training],” says Lopez.

Similar to other ag retailers, Rockwood Ag Services also spends a lot of time on labor issues. The company launched an internship program in 2022 that it hopes to expand upon this year. The program runs during the summer months and is designed to introduce young people to agriculture, explains Lopez.

“The interns accompany the PCAs in the field, pull soil samples, and so on. The goal is to instill a proper work ethic for the interns while at the same time give them a chance to see whether they like the job before they invest four years [in school] and realize it’s not what they want to do.”

Emanuelli acknowledges, “A lot of these kids are really smart. They come out of college and they’ve learned a lot. But, there are some things you do because you love it. It’s not just the money.”

Furthermore, not all ag retail jobs are based solely on farm knowledge.

“It’s a business. You have production, sales, and administration, which are very important,” says Lopez, “and this is another area in which we’re trying to get better, and trying to attract more qualified people. You’ve got to have all the angles covered.”

Future Planning, Growth

The volatility associated with the fertilizer and natural gas markets the past few years should see more “stability” this year, says Lopez.

Yet, the sharp spikes and drops in supply and demand seem to be here to stay, at least for now. Rockwood Ag Services is relying on its expanded market position and industry knowledge to navigate product and material shortages and shipping backlogs that marked the past few years.

The management strategy includes plenty of frequent check-ins and communication with manufacturers, PCAs, sales and purchasing people, and others, to determine inventory and potential risks, keep tabs on forecasts, monitor changes, and stay ahead of any potential disruptions, explains Lopez.

In the near future, Lopez expects Rockwood Ag Services to grow organically by 5% to 10%, with some investments “on the fertilizer side” likely a part of the plan.

“That’s going to be the biggest growth opportunity for us,” Lopez says.