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 This fall, we decided to
take the big question to the local experts. What is going on with
the supply chain and will things be better next year. We also asked
about 2023 pricing for inputs.
The specific questions asked of each person/business were:
Are farmers going to have supply issues next year?
Are costs going to be much higher or do you think they will level
out?
Here are their answers:
Brandt Co.
Burtonview
Eric Gordon of Brandt offered a detailed answer to each of the two
questions.
Question one: “I do not believe the farmers will deal with the
supply issues in 2023 that we dealt with in 2022 when it comes to
herbicides. There are still some supply issues throughout the
industry but I think that a lot was learned from the 2022 season and
the local retailers will be prepared to meet the farmers’ needs in
2023.
“I also believe at this current time we are prepared to meet the
growers’ nutrient needs for the 2023 crop season.
“There are some things that could cause us issues.
“Weather is a major contributor for the success of the crops we grow
and it can also contribute to some supply issues since we depend on
the rivers to move product for us. At this time there is a threat of
the rivers shutting down due to being low and this would slow
product movement, but we hope to have a large portion of product in
position to meet the fall needs.
“The other issue is the continued threat of a rail strike, a lot of
nutrients are also moved on the rail so this could potentially cause
and issue down the road. We do believe if it happens it will be late
enough in the season to not affect our fall season.”
Question two: “For the 2023 crop season farmers are seeing a rise in
cost for fall nutrients compared to fall of 2022. These prices are
actually down slightly from the cost we saw in the spring of 2022.
There are many reason being given for those prices increases and
many of those center around politics, from the war in the Ukraine to
labor cost and also increased transportation cost to get the supply
in place.
“When it comes to other 2023 crop inputs (seed and crop protection)
I see more of the leveling out compared to the increases they saw in
2022. There will be increases but not to the level they saw in 2022.
Most of the reasoning behind that gets blamed on increased labor and
transportation cost.”
Burtonview Coop
Burtonview
Manager Mark Lessen offered his opinion on the two questions
Question One: Lessen said as far as supply issues are concerned the
business is experiencing more difficulty with getting tucks and
drivers more than ever before. He said, "We used to be able to make
a phone call and they had a truck and driver." Plus logistics were
still a problem for grain across the industry with transportation on
the Mississippi River and world events.
As to Costs (question two): Lessen thinks it will be higher next
year with inflation and the logistics issues. "We are not through
the storm yet," he said.
AHW Farm Equipment
New Holland
Speaking with AHW in New Holland Regional Sales & Store Manager Stan
Anderson is concerned about farm equipment and parts in the coming
year.
Question One: "Yes, we will have supply issues.”
The dealership is a year out with tractors and combines. The delays
stem mostly from a labor union strike last year and parts issues. He
says there is equipment sitting on football fields waiting for
hydrostatic pumps. The parts "fill rate" before the strike was at 99
percent. After the strike it was at 83%. Now it is at about 92%.
As far as Costs (Question Two): Inflation was high this year and he
thinks it will continue to rise because of demand. Combine costs
have continued to rise and it has been hard to keep the labor force
leveled out.
Sun Ag
Rural Emden
Question One: The people in the know at Sun Ag in rural Emden are
not concerned about a seed shortage. They feel they are in good
shape and will be able to accommodate the needs of their customers.
However, they are concerned about costs (Question Two).
Comparing the farm economy to that of most consumers they said, “It
is like you get a cost of living increase and you think ‘great!’ But
then the actual cost of living goes up, like your groceries or the
fuel bill.
Farmers are going to have to make the same tough decisions we do
about how to spend their money. But they quipped, nobody is going to
go broke between this fall and spring planting because the
commodities are up.
[to top of second column] |
 Rohlfs Implement
Hartsburg
Nate Rohlfs answered question one with a resounding yes.
Question One: "Yes, we have and will have supply issues this next
year.” The dealership has 354 pieces of farm equipment on order that
are presold and will never hit the lot. He added that if a farmer
doesn’t have his order in by the mid part of October, the wait will
be even longer.
Question Two: As far as costs...higher next year. No one is locking
interest rates and demand is high.
Nutrien Ag Solutions
Atlanta
Alan Guile from Nutrien Ag Solutions in Atlanta fielded the
questions.
Question One, supply issues: Yes, he said the threat of a rail
strike overseas has backed up tech materials and there is a sulfur
backup as well. Plus a truck shortage that may not catch up until
spring. Micro nutrients like sulfur and zinc are in tight supply.
Question Two, costs: He believes it will be higher; more than the
usual inflation increases because there is no indication at this
point things will even out; especially if the rail strike happens.
Guile added that the company has always tried to hire retired
truckers because they are more reliable and available but when Covid
hit many of the older guys didn't want to work so they had to find
new drivers.
Remington Seed
Lincoln
Scott Miller with Reminton Seed had some short and quick answers. He
sees no supply issues for seed (question one)
Question Two, costs: Higher across the board because of higher costs
in labor, fuel, packaging, etc.
Lincoln Ag
Hopedale Ag
Scotts Noltensmeier has concerns about supply due mostly to
transportation needs for the products the company offers.
Question One: On the fertilizer side of the business he said“[We]
need rain to keep the Mississippi River running [as the] cheapest
form of transport.” Products including DAP and Potash are shipped
into the area from New Orleans via barge and a low river means no
barge traffic
On the chemical side of the business Noltensmeier says that the
global market will influence the availability of product. He also
has concerns about the current energy crisis saying that fuel and
electric prices will also impact supply.
Question Two, costs: Notlensmeier says fertilizer will be higher
this spring but chemicals will be flatten out in 2023.
Top Flight Elevators
Lincoln
Todd Steinberg from Top Flight elevators said supply issues
(question one) are going to be connected to transportation. He said
getting trucks will be the challenge. Fortunately the company was
able to move a lot of grain this summer so they do have containment
for what comes later, but are watching the transportation issues
along the way.
From the elevator’s viewpoint, the costs (question two) are going to
be higher because of the increases in energy costs for drying and
storing grain. “Drying and storage costs have been higher due to the
cost of electricity and gas prices,” But he is hoping it will all
level out soon. -----
In summary, are we going to
have supply issues across the board in the agricultural sector?
Short answer – yes. It seems that some of the dealers queried are
more optimistic than others and that may be due to the goods or
services they will be offering to the producer. Seed is much more of
a local resource than dry fertilizers which are mostly imported from
overseas. Farm equipment is also at the mercy of imported goods and
are less likely to recover quickly from the supply chain crisis.
All agree that it is going to cost more to farm in 2023. Inflation
is high, the cost of living is high, interest rates are increasing,
raw material costs are increasing and the delivery of energy is
increasing.
While it is often quipped “what goes up, must come down,” the odds
that it is going to happen in 2023 are slim in the opinion of most
of our local ag suppliers.
[Karen Hargis]
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