Ag retailers are seeking certainty and trying to provide farmers with reliability as the 2022 growing season gets closer.
“I’ve never seen a year like this,” says CEO of Premier Companies, Harold Cooper. “I believe every grower will ultimately get the products they need to plant their crops. Saying that, it isn’t obvious today how we will accomplish that commitment. For Premier I sincerely believe we will look back on this as an Apollo 13 moment.”
Cooper’s assessment echoes across the industry as ag retailers are changing on the fly and operating under great constraints while trying to land their ship and provide the inputs farmers need for the growing season ahead.
Houston We Have a Problem
“I really think the unknowns that are out there in the marketplace are as significant as I’ve ever seen them not only in terms of pricing of some of these inputs, especially fertilizer, but also just availability,” says ARA’s CEO and President Daren Coppock. He shared more on AgriTalk:
Limited crop protection product supply and a 10-year high fertilizer markets are top of mind.
When it comes to fertilizer pricing, many are citing the current anhydrous market which is reporting over $1400/ton pricing. For the team at Premier, which primarily helps growers with spring anhydrous applications, it’s causing them to structure their pricing in a ways they’ve never done.
“For the first time we are requiring signed contracts from our growers on tons they commit to use,” Cooper says. “Farmers will need to pay storage penalties or make up the price difference on tons they do not use. And we will do our best to not force these penalties, but the possibility remains.”
Since the COVID-19 pandemic began, the industry has trained its eye to monitor crop protection supplies because of most active ingredients and many necessary products are sourced overseas. But due to logistical challenges, severe weather events, and production challenges, it’s all caught up to become a patchwork approach to fulfilling needs of many crop protection products.
“I’ve heard from several members that there are hundreds of crop protection products that are on allocation now,” Coppock says. “And so even if you placed your order now, you’re not absolutely sure what you’re going to get, when you’re going to get it, and how much of it you’re going to get.”
Cooper shares Premier is most closely monitoring four herbicides: all glyphosate brands, all glufosinate brands, some atrazine, and some 2,4-D.
“Select crop protection products are just challenging,” he says. “We have allocated certain products to our growers based on 2021 usage. We are offering prepay yet we do not know our costs.”
Like fertilizer, Premier is taking a different approach than ever before in pricing crop protection products.
“Our remedy has been to offer growers ‘no higher than’ pricing with plans to set final pricing in July. We are really asking growers to trust us both on product availability and fair pricing.”
He adds manufacturers are telling Premier that they can supply products based on the 2021 usage levels and Premier is asking farmers to commitment to prepay of products no later than January 20, 2022.
Just like the Apollo 13 astronauts worked with the ground crew to return to Earth, retailers and farmers can communicate and successfully complete the mission during the 2022 growing season.
“Farmers really need to have a good relationship with a retailer going into this kind of a season,” Coppock says.
