Coronavirus a Big Wild Card in Ag Retailers’ 2020 Financial Performance
May 11, 2020 During our annual survey of the nation’s top ag retailers (published in December 2019), most ag retailers said their grower-customers had high hopes for 2020, financially speaking. When asked how their customers felt going into the upcoming season, the majority, 59%, believed 2020 would rank between a five and a seven in financial terms (on a scale of one to 10, with one being “poor” and 10 being “outstanding”). Another 23% thought that the 2020 growing season would rate between an eight and 10 in terms of growth potential, for a cumulative total of 82% thinking the year would rate a five or higher in profit terms. Only 18% believed that the 2020 growing season would rate a four or lower on the 10-count scale for profitability.
Of course, since the annual CropLife 100 report came out, the world has witnessed change at an unprecedented rate. Indeed, with the coronavirus pandemic gripping most of the globe, economic growth forecasts in many sectors have inevitability moved from positive to negative very rapidly. Given this climate, it would have been safe to assume agriculture might also experience some kind of negative change as well.
However, the numbers don’t support this . . . at least not yet. According to the 2020 CropLife 100 Mid-Year Survey, when respondents were asked to rate their financial outlook for the agricultural year at the midway point on a scale of one to 10, 80% still believe it will be better than a five. Broken down, 45% of respondents see the 2020 growing season has rating between a five and seven in terms of overall growth, down from the 14% from the 2019 CropLife 100 survey results. But 35% now rate 2020 as being an eight to a 10 in terms of growth, up 12% from the December findings. The percentage of ag retailers rating the 2020 growing season between one and four on the 10-point scale has risen only slightly, 2% to 20%.
Of course, one of the big potential wild cards for the rest of 2020 remains the coronavirus pandemic. According to the 2020 CropLife 100 Mid-Year Survey, a full 90% of respondents believe COVID-19 will have some kind of “negative financial impact” on their businesses by the end of 2020. Half, 50%, of respondents say they are “somewhat concerned” when it comes to the coronavirus outbreak and its ultimate financial toll. Another 40% say they are “very concerned” regarding their finances because of COVID-19. Only 10% say the pandemic will have “no impact” on their financial growth by the end of the year.
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