Remember the good old days when you could pick up your fertilizer in the spring just before you needed it? Sure, it might cost a bit more, but it was always available.
Since last fall, urea prices are up by more than $250 a tonne, and it’s difficult to find supplies that aren’t already committed. If you bought last fall, on-farm storage for granular fertilizer has paid for itself in just one year.
The nitrogen bill has gone up around $20 an acre on a crop like canola, but the cost from reduced yields could be even higher if you’re forced to cut back on application rates. Phosphate has also increased in price and is difficult to source.
Even paying for your fertilizer in advance isn’t guaranteeing the supply. You could be scrambling to get your full allocation if it’s not stored on the farm because suppliers are being forced to trim back their commitments. Last minute opportunities to rent additional land could be thwarted by the lack of available fertilizer.
Remember when it was relatively easy to turn off-board grain into cash? You might have to wait for contract calls to move wheat, but you could sell canola almost anytime.
That has also changed. Procrastination on grain marketing last fall was costly. Not only did prices drop, but delivery opportunities were increasingly delayed. A record number of producers are relying on the cash advance program because they’re still holding a big percentage of their grain.
Overall, most producers have strong balance sheets, but cash flow will be an issue for some as seeding expenses roll in. A good marketing plan and cash flow management have been extremely valuable.
In a world that boasts just-in-time logistics, producers increasingly need to plan for grain that doesn’t leave on time and inputs that rise in price and still aren’t available when needed.
The self-sufficient bunker mentality has other applications as well. To guard against diesel fuel shortages, some producers are upgrading and increasing their on-farm fuel storage. There have been diesel supply disruptions because of refinery issues in recent years, but thankfully such a problem hasn’t yet occurred in the midst of seeding or harvest.
It’s convenient for some of us to operate from slip tanks filled up at local card lock stations, but on-farm bulk storage tanks could be a big advantage in the event of diesel shortages in a busy season.
Recent years have also seen spot shortages of important crop protection products. Sometimes this is an issue at the manufacturing plant, but other times product demand has simply been underestimated.
Increasingly, producers are making sure they have their products well in advance. They at least check with suppliers regularly to make sure shortages aren’t developing.
Timely equipment repair has also become a concern. New equipment that’s on warranty provides peace of mind. For those of us running older equipment, any repairs requiring a trained mechanic could mean significant downtime. Repair capacity is strained to the limit during the busy seasons. Securing replacement parts can also be fraught with delays.
In this modern digital age, consumers seemingly have access to everything at any time. But not in agriculture. The supply chains and services are often unreliable, both outgoing and incoming, and it seems to be growing worse.
Planning ahead to anticipate system failures and bottlenecks has become a key to good management.
Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at [email protected]