Crop input suppliers had enough inventory this year to get growers through the season despite snarls in the supply chain, but they are forecasting tight supplies and higher costs in 2022.
Nutrien Ag Solutions has its agronomists in the field building crop plans with farmer customers, taking into account what the company knows today about availability and pricing, which change daily, said Jeff Tarsi, senior vice president of North America retail for the company.
“Yesterday, we had price changes on glyphosate, for instance, that were pretty substantial,” he said during Farm Journal’s latest “Farm Country Update” podcast.
Things are changing every day, every hour, he said.
“But we have to be flexible in our business, and our growers have to be flexible and they are flexible on a day-to-day basis,” he said.
The company can make changes to help growers mitigate supply issues, he said.
“We have alternatives, we know what those alternatives are and I feel comfortable with those alternatives,” he said.
“I can’t emphasize strongly enough how important it is to get out ahead from a crop-planning standpoint and sit down and talk about what you’re planning on doing,” he said.
That way, suppliers can take the changes they know about and mitigate them, he said.
It’s important to keep in mind that despite supply chain issues, farmers still have options, said Allan Gray, director of the Center for Food and Agribusiness at Purdue University.
“This is not a dire situation where they’re not going to get anything done or are not going to be able to produce food,” he said.
“We’re going to do it differently. We’re going to choose active ingredients we haven’t used before. We’re going to do different kinds of production activities that we haven’t done before or haven’t thought about before,” he said.
From a farmer perspective, that might be a good thing. And it might be a good deal for suppliers, giving them opportunities to interact with farmers to think about solutions they might not have thought of before, he said.
What he worries about on the agribusiness side is that suppliers could end up in trouble if their farmer customer finds something else works as good as or better than product they’ve been selling, he said.
When suppliers are managing their inventory system, they’re worried about running out of stock or whether they can get a customer back once they’ve lost him, he said.
“And that’s why I think that within the industry there’s a fair amount of panic, including things like, you know, hoarding and over-ordering stock so we try to make sure that doesn’t happen to us,” he said.
It’s a natural reaction when suppliers are trying to figure out how to manage the situation, he said.