According to a report by market research firm, Kline, the U.S. crop protection chemical industry has deceased 3.5 percent among distributors. The report follows the 20 leading distributors, accounting for 95 percent of total crop protection sales. The total 2015 cost of goods sold at the distributor level are more than USD 10 billion.
The 2015 crop protection industry began with challenging market conditions due to lower commodity prices and tight farmer economics, ultimately resulting in lower corn planted acres and affecting crop protection sales for most manufacturers of crop protection products. High inventories rolled over from the 2014 season forced distributors to provide incentives to growers.
Notable acquisitions during the year include: Land O’Lakes (Winfield) and United Suppliers announce merger of their crop input businesses, Wilbur-Ellis acquires Lacey’s Farmacy, Triangle Chemical acquires Cardinal Chemicals and Pinnacle acquires three agricultural retailers.
According to Joe Prochaska, Project Manager in Kline’s Agriculture/Specialty Pesticides practice, “Consolidation continued during the year as the distribution channel looked for ways to grow their business during a down market. With consolidation there is a need for improved efficiency, and as a result, managers must identify inefficiencies within the combined business and take actions to drive out the additional costs of the new entity.”
To learn more about these findings you are welcome to join a webinar which will be held Wednesday, November 18, 2015 at 9:30 AM EDT. Register here.