Farmers looking to find good news regarding the new 2019 coronavirus disease (COVID-19) will find some regarding the 2020 supplies of seeds, agricultural chemicals and fertilizers. In most cases, supplies need to be adequate and even plentiful.
“We had all the inventory in place before this started,” says Charles Baron, co-founder and chief information officer of Farmers Business Network, a San Carlos, Calif., Company that sells farm inputs online. “We already had material from foreign sources, and we have it in our US facilities.”
“We are not seeing any disruption in the supply of N (nitrogen), P (phosphorus) or K (potassium),” said Jeff Tarsi, vice president of North American operations for Nutrien Ag Solutions. “We have a large amount of storage facilities, whether for UAN, urea, NH3 (anhydrous ammonia), potash or phosphate.
On top of that, there’s a fair amount of carryover from 2019, especially in chemistry, Tarsi says. Part of this dates back to the fall of 2018, when prolific precipitation continued into the spring of 2019 and prevented some applications of burn and pre-plant herbicides.
“Our biggest concern is that we would like to see the weather dry up so that we can start the application season,” says Tarsi. “If we can get dry weather, we’re good to go. ”
“From a UPL distribution perspective, I don’t think you’re going to see much of an impact,” says Brian Cardin, UPL Sales Director. “From an inventory standpoint, we’re in pretty good shape,” he says. “Some minor products from Europe could be affected, but I think that impact will be felt more this fall and next spring.”
He adds that there may be shortages of specific seed varieties, but this is not unusual, as it can occur in normal years.
China manufactures agricultural chemicals and chemical components. In UPL’s case, however, most of its manufacturing facilities are located outside of China and remain fully operational, Cardin said.
“We have 27 strategically located formulation facilities around the world,” says Cardin. “So I think we are in a good position to solve this problem from a logistics and supply point of view. ”
Planning is the key
One factor contributing to the agricultural input supply situation is that many farmers have already ordered seeds, chemicals and fertilizers before COVID-19 hit. Farmers who have not fixed their inputs should speak with their suppliers now.
“Communication is essential,” Cardin says. “It’s probably a no-brainer, but if I were a producer today, I wouldn’t wait until the last minute to make production decisions. They need to have ongoing conversations about the key inputs they need. ”
“Planning is an absolute key,” says Tarsi. Farmers who do not have an agronomic plan should consult their supplier or an agronomist promptly. Ideally, it is best to do this in the fall before the next harvest year. Digital tools can help farmers in this process.
“I can’t stress this enough,” he adds. “With our digital platform, we have (digital) crop planning tools that allow one of our agronomists to sit down with a grower and plan a crop, whether it’s corn. , wheat, cotton or sugar cane. ”
Potential Trucking Problems
One factor that could complicate sourcing this growing season is trucking.
“From a general industry perspective, backhaul situations coming from the West Coast are cause for concern,” Cardin said. “The good news so far is, it hasn’t been disruptive.” Concerns about backhaul have not arisen in the rest of the country either, he says.
It is also possible that some states will adjust trucking regulations to improve the flow of agricultural inputs, Tarsi adds.
NBF customers will be able to get lower prices for seeds and chemicals this year. During the week of March 22-28, FBN reduced the prices of seeds by 15% as well as the prices of the chemicals it sells. The price cuts for these chemicals include:
- Paraquat, 12%
- Glyphosate, 8%
- Glufosinate, 7%
“We have seen producers face challenges of declining demand for ethanol as corn prices weaken,” says Baron. “So we decided to reduce the prices of a number of products to relieve them and put them in the best (financial) position possible. ”
Baron says FBN was also able to offer lower interest rates this month for loans, including farming operations, through its FBN Finance division due to interest rate cuts from the Reserve. federal government carried out in mid-March.
“We were able to pass these rate cuts on to producers, so we had an increase in demand from producers who rushed to refinance in order to lock in those rates,” he says. “This is something unique (FBN a), because of our national low cost virtual model for financing.”
The savings can be substantial, especially for land loans, says Baron. NBF rates are now two percentage points lower for a 30-year fixed mortgage compared to 15 months ago. “This is a historic time to lock in very low rates and generate a huge amount of interest savings,” he says.
How delivery will change
One difference between this year and previous years is that the amount of chatter and handshakes between farmers and suppliers has disappeared.
Baron says he detected a change in perspective among farmers regarding COVID-19 in late March compared to early March.
“There wasn’t a lot of concern (about COVID-19) among the growers,” he says. “Last week (March 15-21) that changed quite dramatically.” He notes that a dairy he had lined up earlier in the month for a visit informed him that he didn’t want anyone on the farm and that no interactions were occurring.
In response, FBN has taken steps such as launching drive-through services for farmers who want to pick up produce at one of FBN’s business centers. In this case, a farmer honks his vehicle and FBN staff loads the truck without contact. FBN has also ordered personal protective equipment (PPE) for its staff and increased cleaning of its facilities, Baron said.
Many retailers have demanded that truck drivers stay in their cabs and wait for retailers to approach them, Cardin adds.
“They follow all the CDC (Center for Disease Control and Prevention) rules regarding social interaction,” he says. “Most of our employees communicate by phone or computer to avoid as much personal interaction as possible. ”
Nutrien Ag Solutions has also increased the level of hygienic cleaning in its facilities, explains Tarsi.
It also separates office workers at its facilities from warehouse workers to help prevent the spread of COVID-19.
“We also try to minimize foot traffic in our branches,” says Tarsi. “We have removed all third-party visitors to our branches. If farmer-clients feel they need a face-to-face meeting, they are encouraged to use Skype or some other type of virtual tool.
He adds that farmers can still pick up produce from branches, but they are advised to notify Nutrien staff when they are coming to ensure contactless pickup of produce.
“We are also set up to deliver products to them,” he said.
Tarsi says Nutrien Ag Solutions also allows customers to pay their bills online.
“Our digital platform has allowed us to limit the number of face-to-face contacts,” he says. “It is essential that we keep employees working in our branches so that we can continue to serve producers. ”
Like all major events, the impact of COVID-19 will persist beyond 2020. Cardin advises farmers to consider a supplier’s upstream integration capabilities. He says UPL’s products feature this concept, which means it also makes intermediates that go into its chemicals rather than depending on other sources.
“The more you can be integrated upstream, the more sustainable you can be,” he says.
Baron says COVID-19 brings out benefits of e-commerce that were not initially apparent. “We never thought that sanitation would be a benefit of e-commerce and online shopping,” he says. “It’s an incredibly safe way to shop for products in the new world. ”
Another result will be increased interest in agriculture and a reliable food supply, says Baron.
“Here in California, the supermarket shelves are emptying,” he says. “It’s a reminder of what farmers and ranchers do. You won’t run out of food. The American food system is incredibly resilient.
Farmers have the best work-at-home businesses, and that can be transferred to other businesses, Baron believes.
“I think it will fundamentally change entire sectors of the economy when they realize that, ‘Hey, you can work from home and make it work,’ he says. professionals were almost made by reflex, to jump on a plane and meet someone.
Now, virtual meetings can replace part of business travel, he says.