by
Dave Wilcox, CCA/TSP
Every once in awhile something just
bears repeating. I wrote this article in September of 2002. I hate it when I’m
right………
These are some statistics and
predictions I picked up somewhere along the line as to the future of the Ag Retail
industry that I thought would be interesting to our
readers.1.
There are 13,500 Ag Retailers left in the US. Doesn’t seem like very many!
2. Approximately 54 million tons of plant-food is sold in the US per year.
3. This equals about 4,000 tons per Retailer average. Naturally, some would be larger,
some smaller.
4. 2.1 million people do their taxes as farmers in the US. I doubt some of these people
truly qualify as farmers, but we’ll include them just the same. This would be an
average of 156 customers per Retailer.
5. 225,000 farmers, or only 10.7% of the total, account for 80% of the production in
the US. This is only 16.7 per Retailer. A rule of thumb that has been referred to for a
lot of years is the 80/20 rule – meaning that 80% of the business comes from 20% of
the customers. This indicates that the number of sustainable customers is shrinking
dramatically.
6. 73,000 farmers do 45% of the production capacity in the US. This average is 5.4 per
Retailer.
7. Co-Bank says Iowa has an Ag Retailer every 6 miles. I have no idea how that relates
here in the Central Plains, but would guess we’re separated by maybe a few more miles
than that on average here.
8. There are still 2.1 Ag Retailers per post office in Iowa. Remember, Iowa still has
at least one farmer located on every section and a lot of little towns.
9. There are predictions that in as little as 5 to as much as 10 years, Ag Retailers
may need to be located an average of 60 miles between locations to survive long term.
So what does this mean to you?
1. Less farmers doing more of the business is an unstoppable trend. As the number of
farmers per Retailer indicates, there aren’t many of you left, so every one of you is
important to us. If we’re screwing up, TELL US! We need your business to survive, and
if you’re being treated improperly, we truly would try to do everything we can to fix
it.
2. Longer distances between Retailers will also become a reality. As farmers grow, so
usually does the desire to negotiate for better terms and prices. With the numbers shown
above, who can blame them? As margins decline, volume and efficiency must increase for an
Ag Retailer to be sustainable. Concrete and steel are much more expensive to own than
rolling assets. So, our challenge then is to provide at least the same, or better level of
service in the future that you can get today. Not an easy challenge – but we’re
going to give it a heck of a try.
Starting to sound familiar?????? Seems like all we hear
these days is who’s buying who, or who’s taking over, or what locations are
being closed. We have the Internationals buying out the Nationals, some local independents
are selling out or closing, and we have some other companies that seem to be willing to
buy marketshare, no matter what the cost.
To all you growers out there – the key to your long term survival is figuring out
who can be there for you when you need advice - who can lend a hand when you get behind or
to help you monitor your crops - and where you can go to get the answers to make good
business decisions. Whether you’re talking about Petroleum, Feed, Agronomy, Farm
Supplies, Grain Handling, or the latest in Technology, we think these same needs are also
our key to survival.
There are no other businesses in north central Kansas that have a larger combined
investment, or vested interest, in all the communities that we serve – at least to
the best of my knowledge.
In addition to this, we realize that good competition is healthy, and an American way
of life. Farmway has always had competition, and we have been competition for other
companies for longer than any of us can remember. We have grown and prospered through the
years by serving our patrons with respect, trust, and integrity, as have our competition.
Competition keeps us sharp, keeps us from becoming complacent, and getting that
"give a crap" attitude. And, it makes us continue to earn your business.
It is NOT in anyone’s best interest for there to be NO LOCAL COMPETITION,
ESPECIALLY YOURS!
We have lately been told that it is the goal of some in the area to become the ONLY
supplier, and they intend to do this by driving out the competition – utilizing
whatever methods necessary to achieve this end.
Sometimes the will to swallow territory can exceed the capacity of the stomach. As
always, I welcome your comments – anytime, anywhere.
Nitrogen + Snow = Disaster
by
Dave Wilcox, CCA/TSP
A
customer called me up and asked about putting his N on over the top of the snow cover.
What got him to thinking was he’d gone out to the
"Cover Your Acres" at Oberlin and had seen tracks in lots of fields as he went
west. We talked it over and we both decided that the risk of losing a good portion of that
N was just too high.
A few days later, about January the 23 rd or so, he called and asked where I thought all that nitrogen was
now that we had floods of water coming off all the fields. He knew the answer as well as I
did.
There are very limited opportunities to apply nitrogen on frozen, snow covered ground.
We had a lot of calls about trying to get some fields run, but very few were capable of
application. The risk is too great, the cost is too great, so be very careful about
adopting this practice.
If you were one of those that did, you may want to consider how much you lost and think
about a way to replace it, because this is one year you don’t want to raise a
mediocre (or worse) crop.
I’ve heard it said many times by others, and I’ve said it myself also – there’s
very little relationship between the cost of fertilizer and how much you should apply for
the best economic return! All the economists will tell you that.
If any of you would like to argue that, feel free to call.
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