A major U.S. agriculture force, Crop Production Services establishes new industry standards for products and services geared toward the modern farmer. In pursuing its corporate mission, the Colorado-based enterprise developed the nation’s most efficient supply chain for rapid deployment of seed, fertilizer and crop protection services. Dan Harvey describes how it succeeds in the new era of biotechnology and computer- and satellite-based farming practices.
Crop Production Services (CPS) bolsters the backbone of America: its farmers. “From coast to coast, we serve the people that raise the country’s crops,” says Senior Director of Business Strategy Jeff Tarsi.
These producers’ farms range in size from 100 acres to 30,000 acres. Clients include the row-crop farmers and high-value producers in the West and in Florida such as citrus and fruit-and-vegetable growers. “But we also service the timber industry and the turf and ornamental industry, so we cover a full spectrum,” adds Tarsi
Headquartered in Greeley, Colo., and a retail subsidiary of the Canada-based Agrium Inc. that supplies both products and services, CPS operates 800 retail farm centers, 45 division offices and 12 warehouses throughout the country. Products include custom-blended fertilizer, crop protection chemicals and seed. Field-management services include insect and weed identification, soil sampling, field planning, and custom-blended fertilizers.
Though CPS was founded in the 1980s, the company is backed by more than a century’s experience through its numerous predecessor companies. “We started out as a fertilizer company and eventually became CPS through numerous acquisitions made throughout a 15-year period,” relates Tarsi, adding that the most significant purchases include Western Farm Service, Royster-Clark and United Agri Products (UAP).
“UAP was the largest acquisition, and it had substantial impact,” continues Tarsi. “Historically, CPS was very strong in the nutrient side of the business. UAP was strong on the crop protection side. Therefore, the acquisition provided us a strong internal balance.”
Agrium purchased CPS in 1993. Headquartered in Calgary, Alberta, Agrium is one of North America’s largest and most diversified producers of nitrogen, phosphate, potash and sulfate fertilizers. It’s also a leading supplier of agro-nutrient products to customers in North and South America. As such, the parent company significantly expanded CPS’ horizons. “Previously, we were essentially a Midwestern corn-belt operation,” indicates Tarsi.
STRONG SUPPLY CHAIN
The Agrium association not only broadened CPS’ geographic scope but also helped increase the size of its operation. Today, CPS has the largest agricultural supply chains in the United States. As a retail operation, its supply chain is its greatest strength. Besides the 800 retail farm centers located in the best farming regions throughout the nation, the chain includes more than 30 fertilizer blending, fertilizer granulation, seed processing and nitrogen manufacturing facilities. This robust chain also includes a system of 74 high-capacity seed storage facilities, distribution terminals and large-distribution warehouses to protect its high-quality genetics; an extensive equipment inventory to put to use in customers’ fields, and a large fleet of over-the-road trucks. Further, CPS has developed partnerships with the industry’s most innovative product and equipment vendors.
For these reasons, it’s no stretch to say that CPS has the country’s most effective and efficient supply chain for rapid deployment of seed, fertilizer and crop protection products, as well as eclectic service options. “We’re an extremely service-intensive retail organization, so we offer the highest levels of agronomic and custom application services,” describes Tarsi. “This is evident in our supply chain assets as well as our people. We currently have 9,000 employees who are all dedicated to the North American agricultural retail business.”
PRODUCTS AND SERVICES
As far as products go, CPS’ three major impact categories include crop nutrients, crop protection and seeds. Its big-name brands include Loveland Products and Dyna-Gro Seed. “Dyna-Gro is one of the 10 largest seed brands in the United States,” informs Tarsi.
As the company describes, its crop nutrient products (or its fertilizer) have been its business cornerstone, as it enables farmers to improve crop production by restoring nutrients to their soil. CPS’ crop protection products include herbicides, insecticides and fungicides. In addition, the company conducts research and training throughout the year to stay abreast of new and improved chemistry available through modern crop protection products. Its seed products demonstrate advancements in genetic engineering applied to agriculture. These advancements enable the industry to develop a larger range of new varieties and crop traits through gene splicing. Further, they help farmers produce more crops while decreasing the amount of time they spend in the field.
When it comes to services, CPS positioned itself at the forefront of U.S. field management and, in the process, helped redefine the way farming decisions are made. Its agronomy, technology and risk-reduction capabilities help farmers better manage their business, in turn increasing their profitability through optimal application of crop inputs. CPS employs a total-package approach tailored to meet specific customer needs related to field management and planning, crop protection application, spring planning advice, identification of insects and weeds, latest information on pest control measures, crop scouting, custom fertilizer spreading, soil sampling, global positioning applications, and custom-blended liquid and dry fertilizer.
The company’s innovative service offerings include global positioning systems (satellite transmissions that map fields on a projected grid to chart variations in field and crop environment) and grid sampling (which involves soil samplings taken at specific field grid coordinates to create a geographical database for information such as soil types and fertility). CPS also provides crop scouting (wherein the company’s scouts monitor field pest pressure and other situations to identify problem areas and ensure accurate placement of crop protection products), variable rate technology (deployment of satellite-linked CPS spreaders applicators to apply precise amounts of fertilizer and crop protection products on a site-specific basis), and a geographic information system (specialized software that merges data gathered over time to provide a composite grid-based topographical record of farmers’ evolving field and yield situations).
As it has established itself as a leading champion of conservation farming, precision agriculture and biotechnology, CPS fortunes have flourished in recent years. As Tarsi indicates, the company is experiencing a rapid growth curve that strongly contributes to the parent company’s bottom line. From 2003 to 2008, Agrium’s retail net sales have grown at an annual growth rate of 40 percent, thanks in no small part to CPS.
Tarsi attributes a good deal of CPS’ recent success to the growing move toward grower consolidation. “Much of our growth and the balancing out of our product offerings results from the tremendous amount of consolidation that has taken place during the past decade,” he says, “and we expect to see a lot more, particularly in the Midwest region, which has been a bit slower to consolidate on the producer side, compared to the South. But activity in the Midwest is starting to expand, and such expansion demands increase.”
Along with consolidation, CPS is witnessing advancements in technology that allow growers to become even larger. “Genetically modified organism technology in seed has allowed growers to spread out their acreage,” reports Tarsi. “As the growers become larger, their needs change. In particular, they require one-stop shopping and quicker servicing. That’s where we come in. CPS is able to satisfy their crop protection, nutrient and seed needs, as well as their application needs, agronomic input and even financing and credit. Among our other attributes, we have a very large internal financing group. So, we offer a full array.”
Such comprehensiveness demonstrates CPS’ commitment to the industry, and that’s what differentiates the company, Tarsi points out. “Today, the farmer has larger equipment, is planting more acres and requires bulk-seed capabilities. They’re looking to plant 10,000 acres in the same time it took them to plant 3,000 acres, and that has impacted how quickly we need to feed them the fertilizer and supply them with seed. So, this business is all about becoming what your customer is becoming. Not everyone can do what we do.”
In the meantime, as CPS moves forward, it will continue seeking new growth opportunities across a broad retail spectrum, in particular in the United States, where the company is especially seeking smaller tuck-in opportunities. Such dedication has made CPS what it is today: an innovative, full-service agriculture retailer driven to manifest its vision.