The first half of 2022 is how many companies will measure success—getting growers off to a strong start with their growing season.
However, the current anxiety over the supply chain issue for crop inputs has increased headwinds in Q1 of 2022 with the Chinese New Year and Beijing Winter Olympics.
The Reality of Shipping Product From China
Leaders at Helm are reporting where it used to take 30 days to get product from China/Asia, now it’s at least two months–if you can get it on a ship and container pricing is up 10 fold.
“In my 30-year career this is the first time we have faced a situation of this magnitude because different factors came together at the same time: the reduction of production capabilities in China paired with the shortage of shipping space and container availability,” says Michael Kuhlmann Crop Protection Business Lead at Helm Agro. “Coming together with the Olympic Games in Beijing in the first quarter next year plus Chinese New Year, which is every February, so all these factors together really built up this complexity. In all transparency, I do not expect a significant improvement throughout the first quarter. Hopefully second quarter, things start to stabilize a little.”
During the Chinese New Year festivities and Olympic events, the leaders expect limited shipments to come out of China. Adding to the issues is the current energy crisis.
The supply chain for crop inputs has become increasing complex with global supply and trade.
And as Helm president Dave Schumacher notes, it’s not just active ingredients that are experiencing a bottleneck—it’s inert ingredients as well.
“When you start to have tightening in any of those supplies, it gets to be very disruptive,” he says.
With short-term challenges, the Helm leaders says they are applying a long-term lens that is part of the DNA of Helm, a family-owned company. It’s the focus on partnerships that helped them navigate the challenges of 2021.
“Hopefully, together, we can make the best possible decision in order to cope with the situation which is ahead of us. And hopefully, by the second half of 2022, the situation will start to normalize a little bit,” Kuhlmann says.
What can farmers and retailers do for the best outcome in 2022?
For now, the company has is working to be prepared with sufficient product in the U.S. for the beginning of the crop season.
“Producers and retailers should get in touch, understand the needs for the next year, and try to get that product lined up as quickly as possible,” Schumaker says. “Trying to make those decisions as quickly as possible is very important this year.”
