CropLife Retail Week: AI, ESA Among Key 2024 Takeaways in Ag Retail

Eric Sfiligoj and Lara Sowinski look back at their key stories from 2024.

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*Below is an edited and partial video transcript:

Eric Sfiligoj: Hello. Welcome to another edition of CropLife Retail Week. I’m Eric Sfiligoj, editor of CropLife here again with Lara Sowinski. Lara I guess we survived Christmas. How are you doing today?

Lara Sowinski: I’m doing well. Thank you. How are you?

ES: Hey, I’m doing well. Yeah. Survive Christmas, eat too much. Blood sugar is too high.

I’ll be paying for this all throughout the month of January, I’m sure, as I’m eating nothing but, like, pickles and, staying away from carbs. But charcuterie boards are very useful. They got nuts, they got meat, they got cheese. They come in handy.

LS: Santa bring you a treadmill for Christmas?

ES: No. No treadmill. I have a dog which walks me around the neighborhood twice a day. So, that’s a little better than a treadmill, because again. But. Yeah. And again, the nice thing, of course, is she likes to pause and check out, like, spots in the yards. So that gives me the little wind break in between so I can catch my breath as I’m walking her.

So, hey, so this is our last video that we’ll be recording for 2024. So in honor of that, I thought it would be appropriate if you and I went over our two big takeaways from the calendar year we’ve just lived through. So I will start. The first thing I have to mention, of course, is the CropLife 100.

Every year for the last 41 years, CropLife magazine and its predecessor Farm Chemicals, used that to sort of gauge what’s going on with our main audience. The ag retailers. And in 2024, actually, you know, sorry to report that it wasn’t the best of years, the marketplace had about revenue in the $43 billion range, but that was down from like $46, almost $47,000,000,000 in 2023.

The big culprit, of course, as we said in a report, was fertilizer, that the revenues there were off about $2.5 billion. But I guess the takeaway there is, you know, although the revenues were down, those mean the prices for most fertilizer, for most crop nutrients were down from, over the past two years. So again, usage rates stayed pretty steady.

But because, retailers were getting less per ton for their fertilizer, the revenues dropped accordingly. So again, if we get some moderation, and things kind of stabilized and maybe ’25 things will bounce back up, we will have to see. But, the one other thing to mention about the ag retailers, of course, you know, the terms of profitability, only 28% of the ag retailers in the 2024 CropLife 100 said that they were more profitable than 2023, and that was down from 31% in 2023.

That said, they were more profitable. 51% said that their profit levels were identical. So, again, hopefully those numbers will improve in 2025. We will have to wait and see. But you know, again, the, the hope is things will turn around. But the one thing to keep an eye on, of course, is when revenues are like this, when profit margins are hard to come by, you see more consolidation and I know there were six retailers on the 23 list that were that were not there in 2024 because of mergers or consolidation, and we’ll have to keep an eye on that in 25.

I would expect we’ll see some more of those on that front as, margins stay tight. So, yeah. You know, the December issue of CropLife, which features the top 100. I really do appreciate your analysis. And, you know, as we talked about, recently, looking for the bright spots and what is, in other words, you know, certainly a tough year.

No way to sidestepped, but, yeah, I think, you know, hopefully, mid-year, mid, mid 25 will see, as you said in, in prior years when it kind of starts off on a not so good foot, you know, after spring planting and things start getting underway, you can get a better assessment of how the year is going to go.

And I’m hopeful that, you know, we’ll see some positive things as well. May have to wait a while, but I think that’ll start to, you know, appear mid year. Yeah. We will have to see. And my other big takeaway from this year of course two initials that have dominated the industry since. So I’d say the middle part of 2024.

And that is AI. I’m not talking about active ingredients, which is initials were used to and have been for the better part of 40, 50 years. But we’re talking about artificial intelligence. There was plenty of activity in that on that front when it came to ag tech. Equipment, of course, John Deere would see and spray was sort of the one that kind of kicked it off.

But we’re seeing a lot of companies experimenting with AI, and particularly on the spraying front. And I know I was very encouraged. Because, again, a lot of times these new technologies come into play, but, a lot of buzz regarding them, but the sales don’t reflect that. But, we did in our for a January issue of CropLife, we do our annual buying intention survey of ag retailers.

And I was very, very pleased when we were talking about ag technology spending and 20, 25, 30% of the respondents said they planned to spend more, 1% to 11% more on AI technology for their operations in 2025 than they did in 2024. So again, that’s, that’s pretty good number. Another 48% said that they’re going to spend the same amount.

So again you get 78% of the marketplace. That’s planning to do some significant spending on AI. So I imagine we’re going to be seeing a lot of developments on that front in 2025. And of course, you can pay attention to Crop life and our trade show, Tech Hub Live, which will come up in July to follow some of these developments.

Yeah. And actually that’s a good point because as you said, you know, well, spending and other things are down. People are experiencing tighter, economy and economics. And, you know, with regards to their farm and our management operations and such, you’re still, you know, spending in the areas where they think they’re going to get that immediate, ROI, which, you know, again, a, a I there’s a lot that’s happening there.

Just even some very practical stuff. Not even the, you know, big shiny next thing, but just some very practical things to streamline, to provide better, you know, analysis and so forth. Just things that are, you know, small tweaks, the cumulative effect of, of doing something, you know, better, faster, more, more accurate. You know, all those things make a difference.

So, I’m happy to see that. And I think that’s a that’s a wise spend all the way around. Yeah, it’ll be interesting. Like I said, we had, we had a meeting, a little earlier this month where one of the editors from our sister publication was in, you’re at a European trade show, and they actually saw, a unit on display that uses AI and laser beams to, like, identify weeds in the field.

And then zap them. So, again, it’ll be interesting to see if that becomes a little more widespread in 2025 here in the States, because, again, I know weeds develop resistance to chemicals all the time, but I, I dare say laser resistance may be not something we see on the weed front anytime soon. Maybe Palmer, but nothing else. Yeah, you know, it’s cool.

LS: I know what you’re referring to, and I think of it similar to drone technology how it gets, you know, incrementally, you know, better and better whether we’re talking payload or whatever it is. And I see the same thing with that type of spraying. And, you know, seeing weeds, I using lasers or spot spraying with it, whatever it is, it just gets better and better.

ES: So it’s pretty cool. Yep. So I’ll kick it to you then. Laura, what are your two big takeaways trends wise? Concerns, opportunities we saw in 24 as we move into the 2025 growing season.

LS: Yeah, I think the two big things for me and there and there is a lot I mean, you know, it was nice to kind of think about this because there’s a lot of things that we could have, you know, what are the big things where the big news, you know, trends, development, I think without a doubt.

One item on my list was the EPA’s work plan, and their strategy to comply with the Endangered Species Act. This has been, you know, around for a couple of years. You know, they acknowledge that they, need to do better. You know, they didn’t do things, correctly, in prior years. So now they’re playing catch up, if you will.

So, for strategies in particular, with regards to, to agriculture, rodenticide, which would be the least, impactful. But fungicide, secondly, insecticide and or herbicides. So EPA is releasing first in a draft form strategies for these for areas. And then a final form. So herbicide being probably the biggest of those four categories.

The final herbicide strategy from the EPA was released in August. And, you know, it was, it was I, I compare it to the food safety modernization Act when that came into effect in 2011 and how huge that was for Food and Drug Administration. They hadn’t seen anything that profound in significant and in decades, with regards to food safety.

So I put this in a similar category in terms of, widespread, wide ranging impact on ag. So after the herbicide strategy was released in August, you know, we got a better idea, what that means for the various players and the access from the retailers to, the manufacturers for farm chemicals and ultimately to farmers and growers who in this scenario really are impacted because of how precise, they have to analyze every part, you know, every field, every state.

It’s not just this is my operation. I farm 10,000 acres. We, you know, are going to do this. They have to look at every part of their farm, to understand where the potential is for spray drift or runoff and, and you know what that means? The good news is, you know, so after that type of analysis, I mean, ultimately the goal is to reduce those buffer zones so that you’re not taking viable acres out of out of production.

The good news in this scenario is that, CPDA, CropLife America, American Soybean Association, a whole lot of partners and associations in our industry have really come together to not only take a look at this herbicide strategy, for instance, and understand the impact, but how do we, respond to that?

How do we mitigate the impact? You know, Terry Kippley from CPDA, he said, you know, we need a bumper sticker, you know, let farmers farm in in a way that really captures, you know, what this is about. So, in response, to what the EPA’s is doing and the requirements in compliance and such, a focus on drift reduction adjuvants, CPDA has done phenomenal work again with their members Nutrien, Wilbur Ellis, etc. to use drift reduction and adjuvants as a way to mitigate again, those buffer zones, Daren Coppock and ARA have done a lot of work with technical service providers.

With regards to, the certification requirements, getting funding for TSPs again is a way to work with the farmer grower to understand the impact, to come up with the plan. There’s still a lot of questions, though. The December issue of CropLife is our special report, the ABCs of ESA, which is also available on croplife.com.

Com kind of a good start like to, you know, this is what’s happening. This is what it means. This is what the associations and others are doing in response. But we’re going to be covering this as we go into 25 as well. Getting more specific now that you know, these final strategies are out there, looking at what the industry is doing, to respond.

The other thing and it’s hard to, you know, again, I look at, you know, things that pop up, things that get resolved. But when we talk about supply chain in general and the components of that, like, you know, why does this matter?

This seems like, you know, who cares about the red, see what’s going on. And, you know, ocean going vessels are being hit at, well, the Suez Canal and what does that mean for the transportation? What does that mean when the Panama Canal, the water levels, had dropped to historic lows, thereby limiting the number of vessels that could transit through the locks?

So just on the waterborne transportation part of supply chain, the Mississippi River, again, kind of really, really low water levels last couple, three years, impacting barge traffic. We have the, International Longshore Association. So that would be the longshore men on East Coast and Gulf Coast of U.S as you recall, they went out, on strike in October.

Went back to work, with an agreement that, they would revisit the con contract and, and so forth. So they essentially signed a will, keep things in place until January 15th. January 15th is right around the corner. Thus far, a little news reports here and there. There’s no indication that the two sides are any closer, really, to resolving, the differences over, you know, a slew of things.

So again, what might be the impact of that? And then really, the big thing, you know, with the Trump administration, the threats of, of tariffs and, you know, whether or not that’s a bargaining tactic at this point, you know, put our trade partners on their back foot so they’re, you know, more willing to talk either way as we’ve talked about a lot, a lot, you know, that uncertainty, that threat, you know, is what would almost makes it worse than, okay, now we know what’s going to happen.

So we can respond. It’s that thing that’s kind of, you know, hanging over our heads. And then, you know, really when I think about it, whether or not retaliatory tariffs become part of our trade policy going forward. You know, the, the Trump administration wanting to kind of revisit the US Mexico-Canada agreement, I mean, Mexico and Canada, two of our it is trade partners by far.

What does that mean? And again, it’s all the trickle down effects. You know, these things sometimes seem, you know, far removed from our immediate business. What’s in front of our face day in, day out. But again the the trickle down effect. What this means trade, is really tough. And even if you don’t put tariffs in place, you could, you know, really lean heavily on non-tariff barriers.

What whether that’s anti-dumping countervailing duties by those cited, sanitary restrictions in non-GMO. There’s a lot of ways to, kind of meddle with trade. If you wanted to. So I think those things are really, again, something that they’re just we’re not going to be able to escape this next year. So again, they kind of follow us year in, year out.

I think it’s going to be a little more in the forefront going forward. So those are my two big ones. I think those are those are it.

ES: Yeah that that’s a lot. And again you know like you said ESR, I mean you know, that’s going to be rolled out over the next few years. Luckily they didn’t decide to do or the entire crop protection category all at once.

They staggered when those deadlines were coming out, those new rules were coming out. So that’s a little helpful. And again, like you say, the strike, I know it was averted to January 15th, but as you pointed out, in another two weeks, we may be talking about that again and seeing what that means for the transportation requirements and worries that, we’ll have going into the 25 growing season.