By Brian Hefty
Supply shortages and higher prices: those are the two big reasons why paying and ordering now at your ag chem retailer is a good idea vs. waiting until
in-season.
Let’s talk first about higher prices. Here’s the way the ag chem industry works: if companies feel they can charge more because commodity prices are good, they’re going to do it. To be safe, though, many companies start off the season pricing things a little cheaper than they would like, just to make sure they get a certain amount of business locked up early. In addition to that, most companies have “fill” programs, so they incentivize retailers to take product in the summer or fall. Once retailers burn through their “fill” gallons (or pounds), the retailers have to raise their prices, because their net cost goes up. Now, you never know which retailers have gone through that product and when; but as a general statement, the earlier you buy, the better chance you have to get some of that early, less expensive product.
When it comes to supply shortages, I’m not too worried about having many issues in 2013, but some manufacturers and retailers are very concerned. The retailers who have huge warehouses, lots of bulk tanks, and ample cash got loaded up with product already; so they will likely be in good shape. However, there are some products that no dealer has enough of, including Liberty, Force & Aztec Smartboxes, and even glyphosate. I believe that by June, there will be enough glyphosate to go around; but right now both Roundup and Durango are on allocation, and retailers literally cannot get any more, at least until late spring/early summer. Depending on how this spring goes, there could be other products that run short, especially since early projections are that corn and soybean acreage could be up substantially.
I realize that when it comes to ag chem, it is now a minor deal compared to fertilizer, seed, equipment, cash rent, and a few other things; but if you don’t have the herbicides, insecticides, and fungicides you need, that’s a problem. Plus, since you know you need those things, you might as well try to get the best products you can for the lowest net cost possible. That’s why we always encourage you to plan ahead; prepay with a retailer you can trust; and before you prepay, make sure you can switch products later on or get a refund (plus interest) if your plans change. Good luck!