Farmers attempting to return unused crop inputs are likely to meet with varying degrees of success, depending on the product and the retailer.David MacKay, president with the Canadian Association of Agricultural Retailers, said there is no single accepted practice across the country.“It tends to get drawn down to individual business lines, in terms of policy. I think it has a lot to do with the relationship between the grower and the retailer ….”According to MacKay, the fertilizer industry has adopted more stringent return policies since the world economy tanked a few years ago and world commodity markets bottomed out.Fertilizer supply companies have placed a greater emphasis on contract integrity, meaning most farmers who pre-buy crop nutrients will be expected to honour their contracts, take delivery of the material and keep it in storage until it can be applied.In parts of Saskatchewan and Manitoba, crop nutrients that were ordered by producers and delivered to retailers were never picked up this spring.As a result, large stockpiles of fertilizer are sitting in storage.“I can tell you that retailers tend to be reluctant to return fertilizers,” said MacKay.He said some fertilizer retailers may renegotiate terms of a delivery contract with a customer but in many cases, their hands are tied.He said although retailers hope that farmers will honour their contracts, sometimes special arrangements can be made to hold the inventory for the grower for the next season or make payment arrangements.“(Retailers) do their best to work out special arrangements with their customers that fit the needs of both parties.”A few years ago, some fertilizer retailers were caught with large inventories when the commodity crisis hit.When world commodity markets crashed, the value of those inventories dropped and retailers were forced to absorb huge losses.Since then, inventories have been managed more closely and retailers have tried to minimize risk.“They’ve become very prudent given the lessons learned from two years ago…,” MacKay said.“They’re a little older, a little wiser and as a result, (they) were less likely to be in a position of being overextended on fertilizer.”In an exceptional spring where large amounts of nutrients go unused, retailers will contact suppliers and request that supply contracts be revisited.Sherman Boland, manager at Paragon Ag Services in Melfort, Sask., said retailers are already talking with suppliers such as Mosaic and Agrium to see if delivery deals can be renegotiated.“We’re working with our manufacturing people and the fertilizer companies that we deal with … trying to see if they can extend some help … and see if we can do something with all of the product that we’re sitting on,” Boland said.“So far, some of them have been very, very good,” he added, although nothing has been resolved.Boland said many ag retail companies, including his own, moved a fraction of what they expected to this year.As a result, retailers are overstocked and rural storage facilities are nearly full, even though manufacturers have supplied only a portion of what was on order.According to Boland, Paragon took delivery of about 60 to 65 percent of the crop nutrients that it had ordered for 2010 planting.“The other 35 to 40 percent is sitting on the fence line at the moment,” he said.Ag retailers generally aim to have zero carryover at the end of the spring seeding season.This year, due to freakishly wet weather and a large number of unseeded acres, carryovers will be significant, he said.
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