One large ag retailer shared that in 2018 its operation doubled its exposure with dicamba, and yet the operation surprisingly saw a 50% decrease in drift complaints from 2017, a result likely realized by the mandatory applicator training and education initiatives undertaken by state association groups, such as the Illinois Fertilizer and Chemical Association. Another council member reported that dicamba applications in the Mid-South, where much of the consternation around dicamba drift and volatilization events had occurred the past 12 months, perhaps didn’t fare as well. In concluding the dicamba discussions, it was agreed that, as a result of the 2017 dicamba missteps, there are now grassroots movements underway both outside and inside farming to remove or severely restrict hard chemistry products across the board. The largest legal liabilities that the council anticipates in this area are among large specialty grower operations who believe they’ve been drifted onto and will respond with litigation. Photo credit: Wisconsin Weed Science.

Of concern within the crop protection realm is the proliferation of litigation around glyphosate. One council member said that these developments aren’t explicit attacks on the safety of the glyphosate molecule, but rather a means for activists to disrupt GMO technology in general. Another council member reasoned that “we’re at a point, with the neonic ban in Europe, GMO bans in Hawaii, Prop 68 in California, and lawsuits all across the country against glyphosate, that the activists are better organized, doing a better job lobbying, and they are circumventing the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). The industry may need to reorganize, but at this moment it is on the losing side of this battle.” Photo credit: Iowa Soybean Association.

Posing the question of whether ag retailers could sustain a shift away from volume-based crop protection rebate programs to a go-to-market price strategy, one council member concluded: “Not now, and I think the industry would punish any manufacturer that went away from rebates; the minute you cut rebate programs, you will put an enormous amount of pressure on the retailer.” Another trend the council sees perhaps proliferating is a shift by larger crop protection product suppliers from investment in the retail market to a more direct-to-grower model. The council warned that there is a huge, growing private label product trend in which rebate programs don’t exist. “That portion is taking (rebate) programming out because they buy direct from China and then go direct-to-grower,” the council member reasoned. It was also shared that many independent retailers in the Midwest are feeling pressure from crop protection manufacturers to support entire brand portfolios vs. supporting only the individual products that make the most sense for its growers.  

PACE 2018 saw a much different tenor than previous meetings in regard to the Farmers Business Network (FBN) and others looking to disrupt the traditional retail channel in ag. One council member came out with guns blazing: “FBN has no market share. For us, they’re irrelevant. Now, internally we still list them as an internal threat to our stuff. It’s not that they are completely off the radar; it’s just not as big an item (with growers) as last year.” Still, FBN’s efforts to “level the playing field” between its grower-members and the retail community has ushered in a new favorite buzz word among growers: price transparency. Many on the council believe that one way to deal with the FBNs of the world is to separate e-commerce customers from the guy who wants no service and will bid out all crop protection purchases to the lowest priced seller. Photo credit: PYMNTS.com.

The state of grower-facing, retail-deployed precision ag programs is a mixed bag, according to the Council. Currently, it remains a struggle to get growers to earmark additional dollars to precision ag services other than tri-annual soil testing, and now independent soil testing companies are starting to eat into those revenues across the Corn Belt. Growing precision ag service offerings at the retail level might require a much needed shot in the arm, and one council member thinks that could occur by tying precision ag technologies closer to environmental practices like variable-rate and split-applied nutrients, among others. The ongoing proliferation of digital farming software platforms could also play a lifting role for adoption, the council concluded.

The annual industry-wide consolidation breakdown was kicked off with a report on the recently completed Nutrien/CPS/PCS merger, as well as talk of the Dow-DuPont merger that spawned Corteva Agriscience, a separate ag entity. One merger that has been a bit off the radar in the U.S. but nevertheless remains important is the ChemChina-SinoChem proposed merger. ChemChina had previously swallowed up Syngenta and ADAMA, and it was reported that the proposed merger with SinoChem would give the group control of one of every four dollars spent on the acre globally. On the retail side of things, it is expected that some unique consolidations will form additional regional retail players in the coming months. The big property that many expect to be moved in the next year or two is Pinnacle (formerly Jimmy Sanders), which is funded by Apollo Global Properties, which is rumored to be looking to get its money out of the investment soon. Another point to note on retail consolidation is a notion that ag retail still hasn’t quite hit the sweet spot on physical locations. Numbers from a recent Purdue University survey show most Midwest farmers get product from a facility 7 miles from the farmgate on average. Photo: Heritage Cooperative

The annual discussion of fertilizer kicked off with a report on the situation in Ohio near Lake Erie, where then-Gov. John Kasich recently seized upon political momentum to attempt to have all commercial fertilizers in the state regulated as “agricultural pollutants.” Some outreach by The Fertilizer Institute, along with some schooling on the 4R retail certification program, throughout the Western Lake Erie Basin resulted in a “walking back” of the certification from the Governor’s office, but it is clear this type of legislation is going to be on the table going forward in all distressed watershed regions where crops are being produced. It was suggested that the industry should more proactively approach looming fertilizer applicator regulations, based on what regulations it would support while getting a head start on those practices before regulators could force its hand. Larger farmer engagement (1,500 acres and up) on these practices would help alleviate the issue of fertilizer runoff.