Speakers presented strategies, trends and foresight
In the potash industry, Williamson said the U.S. is not self-sufficient, but North America is. In the U.S., potash production is decreasing, recent DAP production has been decreasing relative to MAP, and MAP consumption has been increasing. The U.S. is a net importer of nitrogen fertilizer now that production has decreased because of the drop in natural gas pricing.
In looking ahead to the many of the proposed fertilizer production plants projected to be coming online in the next five to 10 years, both Williamson and Mitchell agreed that many won’t come to completion. They projected that those likely to succeed will be mostly brownfield expansions.
Mitchell projected that domestic expansions of NH3 production will pressure prices and the U.S. will see self sufficiency in UAN. He said the NH3 market is in transition now that a CF Industries and Mosaic deal was signed this fall. A new spot price market for the Americas may emerge, Mitchell speculated. He said urea imports were running 20 percent behind 2012-2013 levels through December 2013, which projects that prices would have to rise in first quarter of 2014.
Wrapping up their session, they said in the next three to five years, capacity expansions will likely upset the market and may lead to possible price wars.
We’ll have an upcoming decade of more rapid consolidation in the agricultural industry, including the ag retail business, than we’ve seen in the last seven to eight years, according to Allan Gray, Purdue Universty, Land O’Lakes chair of agribusiness.
Gray’s predication was part of his breakout session about the “Retail Outlook to 2025.” His presentation went in the order of using facts and figures to explore farm growth, an examination of market forces and a discussion of implications for retailers.
There has to be an impact on ag retailing as the segment of farmers with more than $2.5 million in sales is increasing, he said, and even today those 2 percent of the farms account for almost 35 percent of farm expenditures or purchases of goods and services.
Gray said surveys continue to show that most farmers are loyal to their local supplier, but those suppliers will have to be more business savvy than ever before for this loyalty to continue. He said farmers are having higher expectations of their retailers.
NEW TECHNOLOGY SESSION
In the other breakout session of Dec. 5, New Technology Session, attendees had the chance to listen representatives from Agrium and A.J. Sackett & Sons share the highlights of each product that was nominated for the AgGateway/ARA Technology Award. Agrium presented highlights of its ESN production. Ben Sakoura with Agrium explained that ESN is a polymer-coated nitrogen (N) fertilizer that improves N use efficiency in crops and reduces N lost to the environment. Therefore, ESN delivers N to growing crops throughout the season, not just when it’s applied. It is a granular fertilizer and blends well with other products. Todd Shearer from T.R. Shearer, a full-service ag retailer, explained how his operation used ESN and found many benefits such as its easy ability to be stored because it doesn’t draw water and doesn’t clump. Shearer claimed using the product had increased sales 21 percent and increased his bottom line because customers recognize the value of the product and service.
- US soy exports to China could drop with crush-margins at 2-yr low
- Corn to see record production for 2014-15
- Maximizing buyer power in volatile markets
- Insight into drought tolerance of TAM wheat varieties
- Ag markets turned mostly lower Tuesday morning
- GMO safety, weed control top concerns as U.S. study kicks off
- U.S. GMO labeling foes triple spending in first half of this year
- Activists fighting Golden Rice even more in 2014
- Source shows half of GMO research is independent
- White House issues veto threat on bill to block WOTUS rule
- Stoller soybean research produces 214 bushels per acre
- FCC aims to offer high-speed internet to rural America