Year In Review: Remembering 2010
November 12, 2010 As the agricultural market entered the second decade of the 21st century, ag retailers were looking for some sense of normalcy. The marketplace had just undergone two very uneven — some would say chaotic — years with wild swings in business fortunes, financial reform, input prices and commodity values. In that sense, 2010 was a welcome breath of fresh air. Overall, there were no extraordinary market meltdowns, company failures or cries of anguish from customers. Instead, people and companies got back to the business of providing products and services to grow the food, feed, fuel and fiber needed by an ever-increasing world population.
Looking back over the year, there were several significant events in the world of CropLife and its readers. For the most part, these fell into six broad categories. Here, we’ll review each of them in turn, looking at the key events for each.
MARKETPLACE
In 2010, agriculture came under seige, with several outside sources questioning its motivations and impact on the health of the planet. In response, CropLife America began a campaign to help defend agriculture.
As CropLife America President Jay Vroom explained, the rise against U.S. farming practices and the call for “slow and local” farming practices to be employed has put public trust at odds with American producers. “We all are under assault because the confidence of the American consumer has been beaten back,” said Vroom. “There’s a collective need for all of us engaged in agriculture to communicate a ‘modern agriculture’ message. And that includes the 3% to 4% classified as organic — many are using modern technology and have very little use for 100-year old methods.
“This movement has allowed all of us to pull together,” continued Vroom. “It’s not just crop groups — we are talking a lot with animal ag folks, something I always thought was a missed opportunity. This is a very real threat to the science and technology basis of what American farmers do — produce safe, affordable and abundant food, fiber and renewable fuel. This threat has pulled us together like never before, and hopefully just in time.”
During 2010, the association launched its new Web site at www.CropLifeAmerica.org that puts the modern agriculture discussion front and center, and offers a variety of information geared to frequent users, including sections for students, government officials and the media.
Along these lines, 2010 was the year when many companies with a vested interest in agriculture began heavily promoting sustainable agricultural practices. For example, in June in Chicago, crop protection product manufacturer BASF Corp. discussed this topic with gathered members of the industry at length.
“Sustainable agriculture is a complex and difficult topic, but our definition is pretty simple,” said Dr. Peter Eckes, president, BASF Plant Science. “We are talking about farming solutions that maintain the right balance between economic success, environmental protection and social responsibility. We want to help growers achieve more yields on the same amount of land using less water and less energy. But we also want them to maintain their way of living.”
REGULATORY
Regulatory issues were, and remain, big threats to the ag industry. As David Flakne, senior state government relations manager, Syngenta Crop Protection, explained. “Our industry is experiencing the onslaught of regulatory activity with the magnitude of potential impact far beyond any time in my 28-year career. Leading the list is a Sixth Circuit Court ruling which will require pesticide applications ‘on or near water’ to require a National Pollutant Discharge Elimination System permit.
Until now, pesticides have been regulated by the Federal Insecticide, Fungicide and Rodenticide Act where ‘The Label is the Law.’ However, the outcome of a single court case has expanded EPA‘s regulation of pesticides to include Clean Water Act permits and potentially burdensome reporting and recordkeeping requirements. It appears that lawsuits, court rulings, and activist propaganda threaten to undermine science-based decisions and the regulatory process that has made American agriculture the envy of the world — definitely a huge concern.”
Spray drift also remained front and center for ag in 2010. One of the most pressing regulatory challenges for all applicators is EPA’s proposed changes to spray drift guidelines listed on labels. They currently say, “Do not apply this product in a way that will contact workers or other persons, either directly or through drift.” Industry stakeholders such as the National Association of State Departments of Agriculture had requested clarification on how to interpret and enforce these instructions. A label change released for comment in 2009 stated: “In addition, do not apply this product in a manner that results in spray [or dust] drift that could cause an adverse effect to people or any non-target organism or site.”
Does the wording help? Applicators don’t think so. David Eby of Agriflite, Wakarusa, IN, described the guideline as a “jobs bill for attorneys and additional state employees — investigators. It would have a dramatic chilling effect on pesticide applications with resulting reduced food production.”
INPUTS
Weed resistance continued to worsen. In several states, there are now confirmed multiple weeds that are resistant to glyphosate. Glyphosate-resistant kochia has been confirmed in Kansas. Kansas State University and Monsanto Co. scientists have completed long-term evaluations — including greenhouse and field testing — of a limited number of independent kochia populations on privately-owned land in western Kansas.
“If glyphosate-resistant kochia is suspected, the grower should consider a two-pass weed control program that includes use of residual preemergence herbicides that control kochia,” said Curtis Thompson, a Kansas State scientist.
The situation has been particularly bad in the south. According to Dr. Gary Fellows, regional tech service manager, diversified region for BASF Corp., the Mid-South is really struggling with the problem. “I work a lot in the South where we have resistant Palmer pigweed,” said Fellows. “This weed is basically changing the concept of agriculture in these areas. In Georgia, for cotton production, approximately 70% of the glyphosate-resistant cotton grown last year was hand-weeded. Once the Palmer pigweed gets above 2 inches tall, there’s nothing you can do to control it. This is taking us back to production methods that were used in the 1970s.”
In fertilizer, retailers who were burned by handshake deals with grower-customers during 2009 began calling for the use of formal contracts in their business dealings. In response, the Agricultural Retailers Association came up with a sample contract for fertilizer retailers to use. This effort is ongoing and should remain a key trend for the marketplace during 2011.
Also expected to carry over into 2011 is the availability of some crop nutrients, particularly phosphate. At the end of 2010, PhosChem plans to exit the phoshate business, limiting supplies of this popular macronutrient going forward.
TECHNOLOGY
In September, MyWay RTK LLC launched a cell-based RTK GPS solution that brings always-on subscription-based positioning and wireless Internet access to growers and agribusinesses in Illinois. What makes the system unique is its vision to interact with multiple brands of equipment and be distributed through a network of value-added dealers; all working together to promote the concept of open-access RTK corrections to create more value for their grower-customers.
During 2010, technology became even more important to the ag retail marketplace, with the continued rise in popularity of smartphones, YouTube videos and social media. According to Matt Hopkins, CropLife online editor, there were several good business reasons to get involved in any or all of these trends. These included providing better customer service, building new relationships and offering a competitive edge for those companies that master these technologies well.
CONSOLIDATION
The $4.7 billion deal between CF Industries Holdings, Inc. and Terra Industries Inc. in mid-March ended a 15-month saga that, through its course, involved four fertilizer companies, many rejected offers, and two terminated agreements. After repeated rejections by Terra of CF Industries and in turn, by CF Industries of Agrium Inc. throughout 2009, all looked to be settled early this year. Yara International ASA of Norway signed a $4.1 billion cash merger agreement with Terra in mid-February, while Agrium extended the expiration date of its latest attempt to acquire CF.
Then CF filed its intent to better Yara’s offer for Terra. Terra’s Board of Directors quickly agreed to the CF deal — which will form the world’s second largest nitrogen fertilizer producer behind Yara — and terminated its merger agreement with Yara. Agrium announced that it would no longer pursue acquiring CF Industries or the election of its nominees to CF’s Board of Directors.
A deal that didn’t happen involved Albaugh Inc. and Makhteshim Agan Industries Ltd. (MAI). This deal was called off in September. According to a MAI press release, the company postponed the acquisition agreement with Albaugh after it discovered “a material deviation” in its discovery data. “We have taken the right decision given the material gaps which emerged during the due diligence process,” said CEO Erez Vigodman. However, according to Albaugh, it called off the deal once MAI demanded changes in sale terms. “Makhteshim Agan attempted to force major changes to the transaction at the 11th hour,” said Dennis Albaugh in a press release.
During late 2010, Potash Corp. of Saskatchewan found itself a takeover target of Austrailian mining giant BHP Billiton PLC and SinoChem. Who ultimately ends up with control of the company will probably be answered in 2011.
Under the heading of consolidating resources, three cooperatives — O’Neil, NE-based Central Valley Ag Cooperative, Aberdeen, SD-based South Dakota Wheat Growers and Ames, IA-based Farmers Cooperative Co. — partnered to create Consolidated Sourcing Solutions to provide better fertilizer service and cost to their grower-customers.
PEOPLE & COMPANIES
Kova, an Indiana-based, family owned and operated business, celebrated its 75th anniversary. The company started as Kova Fertilizer Corp. in the spring of 1935. Today, the company has retail and wholesale locations throughout Indiana, Illinois and Ohio.
Vern Hawkins has been named president for Syngenta Crop Protection, effective Jan. 1. He previously served as the company’s vice president of U.S. commercial operations. Hawkins brings considerable leadership experience along with sales and marketing expertise with his new position, having been with Syngenta for 23 years.
Rob Williams was appointed CEO of Makhteshim Agan of North America, Inc. (MANA) Crop Protection, succeeding John Rabby. Williams has more than 17 years of experience in the crop protection industry. He has been with MANA’s parent company, Makhteshim Agan Industries (MAI), for 11 years and most recently has been serving as CEO of Makhteshim Agan UK.
IN MEMORIAM
John L. Hagaman, former CEO of Dow AgroSciences, passed away in March. Hagaman joined The Dow Chemical Co. in 1961 after earning a bachelor’s degree in agricultural engineering from Texas A&M University. Named president and CEO of Dow Elanco in 1989, he oversaw the change to Dow AgroSciences LLC and retired in 1999 after 38 years. In 2003, he advised Olympus Capital on its Arysta LifeSciences investment and later served as Arysta’s interim CEO. He was named Arysta’s Board of Directors chairman in 2004, retiring in 2008.
Also, Bob Mills, a long-time employee for tender maker Ray-Man Inc., died following a long battle with cancer. He was 54.
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