In some ways, retailers say they are at a relationship disadvantage with many growers when it comes to risk management. Fertilizer deals made on a handshake can create devastating risks when companies buy high and get trapped in a sudden price drop that the grower expects to receive.
Seed / Biotech
Surprisingly, the demand for conventional seed in some markets grew in 2008 as growers revolted against paying higher tech fees for biotech seed types. Still, the demand for biotech seed was growing, specifically with increased interest in LibertyLink soybeans as an alternative to Roundup Ready varieties.
Besides price, transportation continues to be an issue. Railroads continue to balk at hauling anhydrous ammonia (NH3), driving up its price and keeping supply situations tight. Many retailers are exiting the NH3 market altogether rather than fight this distribution battle, coupled with insurance and security risks.
With corn for ethanol demand dropping, there are numerous predictions that soybeans will be the king row crop in 2009 — at least in terms of new planting. Corn, wheat, and cotton will all lose acres in 2009 to soybeans, which could also benefit from fewer crop input demands and higher commodity prices relative to other row crops.
Spray drift remains a big area of concern for the marketplace. New EPA drift reduction lists might contain mandatory buffer zone requirements, which the application industry opposes. “Some in government feel that based upon the evidence and our technical advances that zero drift is possible,” said one PACE Council Member. “But we need to make the point back to government that although zero drift is our goal, it’s not attainable.”