Cycles of consolidation occur in all industries and then over time they breakdown and fragment again. We saw this first hand in agriculture around 10 years ago when Agricore United was buying up independents across the prairies; shortly after that a number of new independents or existing independents sprang up like gofers to fill the void left behind by the grain giants of Western Canada.  How will the consolidation play out this time? Here are some current market dynamics to consider:

· The average age of the independent retail owners and their succession plan.

· Price shopping and aggressive pricing in the market has pushed margins very low.

· The correction we saw in the market last year eroded some equity from many retails.

· Agrium creating CPS Canada (crop production services) to acquire independent dealers that wish to exit the market place or to take over retails who went broke.  To date Heartland Agro, Servagro and Ross Agri have become CPS stores.

· Viterra has acquired Lakeside in Southern Alberta and say they are potentially looking to buy more market share via the acquisition of existing retails.

· Agrium trying to acquire CF industries which will further reduce supply options in Western Canada

· The average farm size has likely doubled in the last 10 years, meaning they need a different service offering than the traditional retail provides.

· Farmland equity funds buying up farmland in Western Canada (rumors of some grain companies being involved) to control the land.

· Continued Market volatility. Who will be able to navigate and manage their risk moving forward.

Despite the picture these points paint we are seeing opportunities.  We believe agriculture is in the best position it has been in for many years, why else have we seen Bay Street turn their eyes to agriculture?

At DynAgra we are a young, truly independent Ag business that is focused on leading our industry forward.  We are committed to the farmers in the communities in which we live.  We have invested heavily in advancing agriculture through technology backed innovation;  DynAgraVRT, My Farm Manager, Sure-Check Soil Testing, Flexi-Scouting, DynAgra Finance and in bringing other new innovative ag products to our customers that make them more efficient, effective and hence profitable.

As independent entrepreneurs, if we continue to work, communicate and grow together, we will be able to capitalize on the future.

Create- Innovate- Cultivate

Remi Schmaltz