Getting to the right place at the right time
More than a decade ago, the agriculture industry began promoting the 4R Nutrient Stewardship Program. The goal is to encourage best management practices that optimize efficient fertilizer usage.
The benefits of the system are multifaceted. It brings potential increases in production and farmer profitability along with enhanced environmental protection and improved sustainability. The pillars of the 4R program are:
- Right Product
- Right Rate
- Right Place
- Right Time
I believe the program has made strides toward its intended goal and will continue to be a part of agronomic best management practices going forward. It delivers results.
Here in mid-April, as I assess current stress points of input markets, the pillars of the 4R program provide a broader message—one that covers all aspects of agriculture. When it’s “go-time” in your operation, you expect and rely on the entire supply chain to deliver the right product at the right place and at the right time.
Of course, every year brings disruptions, and this year is no different. While the seed business has been calm, both fertilizer and crop protection pose potential challenges.
In a reversal from the past two years, the fertilizer market has been on a downward trajectory since last fall. Everyone in the system was waiting to see who would make the first move on spring needs. Manufacturers were reluctant to increase inventories at values that may not be profitable. Dealers and retailers were trying to anticipate where the market would settle to minimize risk. And many producers were looking to find values after two years of extremely high prices.
Combine these circumstances, and you end up with some of the lowest inventory levels in many years. This system couldn’t handle steep demand for long periods without maximum efficiency. It needed help from Mother Nature.
Most of our trade area has seen favorable weather since the latter part of March without significant weather-related delays. The immediate forecast looks to be more of the same. The current size and speed of farming and application equipment mean we go through inventory faster than it can be replenished. It’s safe to say every ag retailer in our trade area is facing the same issues.
Our procurement team had contracts and product deliveries in place to cover normal or slightly above-normal movement from mid-March through mid-May. We anticipated increased movement with the lower values.
Transportation continues to be the biggest hurdle right now. High water in the lower Mississippi and Arkansas rivers has slowed product movement, resulting in delayed pick-up times and about 20 fewer miles per day for barge movement. The Missouri River faces the opposite effect as it is operating with reduced drafts. To move up the Missouri River, barges must be partially offloaded at St. Louis or other spots.
Rail delivery has been inconsistent at best. That’s nothing new. And we continue to feel the reduction of available truck freight. Trucking logistics have been an issue for several years with no fix in sight.
It should be no surprise that this environment—demand outpacing supply—has led to higher prices on at least some products.
I believe MFA is equipped to work through this better than most in our trade area. Teamwork among our retail facilities allows us to efficiently share and move product in this wide-open market. It’s also an opportunity to showcase the benefits of our new agronomy facilities in Ravenwood and Higginsville.
The crop protection market is in much better shape than in the previous two years. However, there are issues in some areas.
Active ingredients for most major chemistries have been replenished, resulting in lower values on many popular crop protection products. Fungicides face some tightness at this point. Use our team to stay abreast of the latest news.
This is an exciting time of year. Prep work, planting and caring for a growing crop demand a lot of attention. We’ve seen relief in some input costs, but inflation has driven up others. Profits will most likely be tighter this year.
Team MFA is here to help you manage some of that risk. Our grain professionals can help you protect or lock in coverage on some acres.
Our team takes pride in serving your needs. We are eager to do it once again despite the current challenges. That’s who we are. As Terry Bradshaw once said, “When you’ve got something to prove, there’s nothing greater than a challenge.”
Thanks for what you do to help ensure food security.
- Created on .
- Hits: 484