Industry Consolidation Set To Increase Going Forward
September 8, 2014 Sometimes in life, timing is everything. This is particularly true when it comes to speaker presentations being made at trade shows or association annual meetings, where an industry trend will be mentioned and seemingly come true within a matter of hours (or minutes) afterward.
I got to experience this incredible instance of timing this past week while attending the Mid America CropLife Association (MACA) meeting in Indianapolis, IN. On the final day of the meeting, one of the speakers was Terry Barr, senior director for Knowledge Exchange Division of CoBank. In Barr’s presentation, entitled “The Financial Shape of the Agricultural Industry,” he started talking about how the agricultural market has enjoyed record profits over the past few years, in part because of high commodity prices. But he predicted this era was coming to an end and that consolidation, which has been relatively slow since 2008, would ramp back up going into 2015.
“There is definitely more consolidation coming in agriculture,” said Barr. Of course, anyone who has paid attention to the ag retail marketplace would hardly argue. This past year alone, giant ag retail organizations such as Pinnacle Ag and Wilbur-Ellis have been systematically gobbling up smaller companies across the U.S.
Loading ...But then came the kicker. “I would also expect this consolidation trend to extend beyond just agriculture and into the supplier sector of the business as well,” said Barr. Literally, as he was saying this, my mobile phone’s e-mail buzzed, alerting me of a new message. Looking down, I read a press release announcing that long-time ag equipment supplier Miller-St. Nazianz had just been purchased by New Holland, which is owned by the same parent company as Case IH.
As I said earlier, timing is everything. In this case, the evidence suggests that my e-mail alerts regarding ag industry consolidations will be increasing in frequency in the weeks ahead.
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