Trends on the Minds of Growers, Agribusiness Going into the ’05 Growing Season

By Jason Hanson
Certified Crop Advisor
jlhanson@agriliance.com

I spent quite a bit of the winter attending or presenting meetings across the area of northwest Minnesota and North Dakota, interacting with growers and retailers. There were many interesting discussions about what went right or wrong last year, and what might be on tap for this upcoming season.  Here are key trends and topics of interest that seem to be common from a grower and retail dealer standpoint.

Trends on the Minds of Growers Going into ’05
Fertilizer prices -- The volatility of fertilizer pricing has made for some real issues. Large increases going into the fall made for some indecision as to planting intentions. Then the market softened somewhat in late winter for a period of time. Now again the market has seemed to grab some strength. Most of the price increase seems to be coming from the supply situation rather than the demand. Pre-pay in the fall might be some of the higher priced product compared to some product a couple of months ago. But with natural gas being volatile and supply tight, things are up in the air at this point. It is making for some tough decisions when putting production budgets together.

Amount of open acres -- There is still a large amount of undecided acres in the countryside, still a considerable amount of acres to be decided. With some of the dryness concern in Brazil, the soybean market has rebounded somewhat. This has made for some late switching of crops. There seems to be more interest in wheat this year, and the cool season broadleaf crops had early acres committed. Markets, fertilizer pricing and costs are going to make for some last minute decisions depending on spring moisture or lack thereof.

Soybean rust -- How can you not read or hear something about soybean rust? There are several concerns with the soybean rust potential: what are the chances of it being an issue in our production area, when do you pull the trigger to spray (if at all) and will there be enough fungicide available to handle the potential problem. There has been many meetings concerning this disease and the interest has been high. Even if you don’t grow soybeans, the potential is there to affect acres and markets for not only soybeans but other oilseed crops as well. It will make for some drama this summer.

Supply of certain herbicides -- The biggest one that comes to mind is Spartan. The demand this year looked to be stronger than last year as more Spartan got used on sunflowers and other crops. But supply became a huge issue and then Authority, Spartan and Blanket were bought up quickly. There are still other possibilities like Prowl H2O or a potential Sect 18 with Valor for sunflowers, but are limited in some aspects. In some cases, the difference between having this active ingredient or not is like either growing the crop or not.

Trends on the Minds of Ag Retailers, Dealers Going into ’05
Fertilizer supply -- Supply issues are a big concern going into spring. The markets have been strong at times and there is considerable overseas demand. Just look at the potash market, with very tight supplies and allocation. The market is going toward making buying decisions for spring demand the previous late summer/early fall. How does one make purchasing decisions half a year out when the market changes rapidly? There are more hub plants that are popping up around the area to ensure supply in the country. Possession is nine tenths of the law in fertilizer. With supplies tight, lower nitrogen soil test levels and transportation bottlenecks, there are some supply issues that could make for interesting pricing this spring.

Allocated crop protection products --  There is a rather long list of products that will be considered allocated or in questionable supply. Just-in-time inventory management by companies is making for supplies of products that cannot meet demand in certain situations. Products like Starane, WideMatch, Prowl H2O and Spartan products are ones that come to mind. Also, most to all of the fungicides have been limited in availability to see what type of demand from soybean rust might be needed. This type of allocation isn’t all bad, as it puts a stop on fear buying and hoarding of these products.

This market is unique in that many of those products like Headline, Stratego, Quadris, Tilt, Folicur and others are needed for disease control in other crops we grow. Having them available for leaf disease or cercospora control is very important even if soybean rust isn’t an issue for the northern plains crops. Trying to get enough supply of needed products and substitutable chemistries is a large task of chemical department managers.

Soybean rust -- While most dealers feel that this will not be an issue in the Northern Plains this growing season, how do you get ready for something you have never had to deal with before? Being able to supply enough fungicide, spray enough acres if needed, proper identification and recommendations involved around the disease, etc, can be factored into the mix. Spraying many acres a day is one thing at ten gallons per acre, try doing it at 15-20 gallons per acre when the demand could be potentially higher if rust becomes a risk to soybeans. Working with growers to supply their needs for information and product will be very important.

Finding qualified employees -- The market for good people is getting tougher as the supply is getting smaller and shrinking business margins are making for dealerships doing more with less. The aspect of hiring is getting more competitive as dealerships compete for skilled and experienced people.

Again, 2005 is going to offer some challenges for growers, dealers, and agronomists. Hopefully, weather will be more cooperative, though never fully, it seems. So as always, communicating with each other on managing product, treatment, equipment, and application needs will go a long way, as and when pest and treatment issues inevitably arise.

Hanson is a certified crop advisor near Devils Lake, N.D.