U.S. Ag: Undercut At Every Turn

Fluctuations in overseas markets are causing domestically-based ag retailers to re-evaluate several aspects of business as the global crop protection market expands its reach into developing ag markets worldwide.

“I think the biggest issue that we are seeing is the global market shift away from North America to other areas of the world,” says Dave DuFault, VP & GM retail business, Simplot Agribusiness. “It used to be that North America was the best market in the world for ag chemicals, but that’s not necessarily the case anymore.”

Suppliers are now able to sell products at higher net backs overseas, says Simplot Grower Solution’s (SGS) Charlie Grasham, director of crop protection. “Latin American net-backs are often better right now, and retailers in North America are now fighting globally to get enough product on hand.”

Amy Asmus, owner, Asmus Farm Supply, Inc., is also dealing with the market shift at her and husband Harlan’s Rake, IA-based outlet.

“Where a retailer can really get into trouble (with a situation like this) is when you have a spring like we did this year,” explains Asmus. “The wet weather around planting time really screwed some things up because growers couldn’t use many of the pre-emergence products they had planned to, and retailers had already ordered those products, so all of a sudden you need to quickly change chemistries and order new inventory, causing a bottleneck in supply.”

According to Simplot’s Du­Fault, the changing dynamics of the global market are also driving deviations in inventory procedures. “Five or six years ago it was all about ‘just in time’ inventory,” he says. “Now, it’s ‘just in the nick of time, and just enough’ when it comes to inventory. Additionally, everyone is watching their cash-on-hand more closely than five years ago, and that comes with the depressed commodity prices many are forecasting.”

As an example of the inventory issue, DuFault and Grasham cite the difficulties in 2013 in securing large supplies of dicamba from China-based manufacturers.

“We saw some challenges with securing enough dicamba last year, as much of the product was being allocated to the South American markets,” says Grasham. “Retailers now must cultivate a strong relationship with the distribution network in order to make sure they have ample products to support grower-customers.”

China is also in the process of reportedly “cleaning up” its ag chemical industry, imposing new environmental regulations that will drive the cost of production higher, leading to increased prices for U.S. manufacturers sourcing raw material from China.

“Chinese manufacturing is being scrutinized more closely by the Chinese government, and that is leading to increased costs,” says Grasham. “It used to be you said ‘Well, we’ll get it from China because it’s so cheap,’ but that’s not necessarily the case anymore.”

Meanwhile, Asmus is keeping a keen eye on South America, specifically Brazil, but it’s got nothing to do with the 2014 World Cup being hosted by the South American power.

“Brazil is huge and their government has committed large amounts of capital to beef up infrastructure to get products to market more effectively,” she says. “The Brazilian government is working very hard to support agriculture in their country, and it’s going to be very hard to compete with that on the world stage.”

Asmus is also seeing a need for more painstakingly precise planning with growers, although that is not always a negative for the No. 66-ranked CropLife 100 retailer. “Now we are forecasting in July for the next year, before we’ve even sold this year’s entire inventory,” she says. “One area where that can actually be a plus is in dealing with weed resistance issues, as it helps us lock in a multi-year management plan where we can know three to five years ahead of time what products that grower is going to need.”

Asmus would also like to see a friendlier legislative climate in Wash­ington, DC, believing such a change could benefit ag retailers competing for supplies on the world stage.

“Domestically there is not a whole lot of support for agriculture, and internationally the U.S. is not viewed as a country that overwhelmingly supports ag initiatives,” Asmus says. “We need lawmakers to support the industry, and to figure out what we need to do as an industry to make U.S. agriculture number one again.”

Leave a Reply

Special Reports Stories

AJ Sackett HIM Mixer
Crop NutritionFertilizer Additives: TLC In Blending
April 2, 2016
Blending additives in fertilizer systems has gotten more challenging as their number and complexity has grown. “There is a huge Read More
Verdesian TO_BrandFamily
Crop NutritionCrop Nutrition: Selling The Value In Additives And Enhancers
April 1, 2016
Market highs and lows can both drive an increased interest in new products — ones that add more yield potential Read More
Liquid Tanks at Asmus Farm Supply
Crop NutritionAsmus Farm Supply: The Importance Of Good Partners And Crop Nutrition
March 31, 2016
As one of the nation’s CropLife 100 ag retailers, Asmus Farm Supply (AFS) has spent most of its 50-plus years Read More
Planter in Iowa
Crop NutritionHelena’s H3: A ‘Systems’ Crop Nutrition Approach
March 30, 2016
An old saying claims that to solve any problem, “two heads are better than one.” But when it comes to Read More
Trending Articles
Eric SfiligojMissing The Family Ties In Agriculture
April 25, 2016
By its nature, the agriculture market is cyclical. Up and down cycles come and go with a regular pattern. For Read More
HerbicidesHerbicide Resistance In Waterhemp Continues To Grow
April 22, 2016
Twenty-five years ago, waterhemp was virtually unknown to Illinois farmers. Today, the broadleaf weed blankets corn and soybean fields across Read More
Eric SfiligojBiotech Corn Drop More Economics Vs. Consumer Rejection
April 18, 2016
Since their introduction into the agricultural marketplace, biotech crops has steadily grown in acreage in the countries of the world Read More
Crop InputsBayer: 5 Reasons We Disagree With Maryland Neonic Ban
April 12, 2016
We’re disappointed that the Maryland legislature chose not to stand up for sound science and the rights of Maryland’s homeowners Read More
Corn
OpinionChallenging Global Economic Conditions Putting More Heat On U.S. Ag Retailers
April 7, 2016
There it is. That vague, slightly sickening feeling in the pit of my stomach. Things are getting weird out there. Read More
ScoutPro iPad
Precision AgWhat’s Trending In Soil Testing And Scouting
April 6, 2016
Keeping up on soil testing and scouting, especially following unusual weather conditions, can play a role in maximizing yields. Soil Read More
Latest News
BAICOR
CropLife 100BRANDT Acquires Utah Specialty Fertilizer Company
April 28, 2016
BRANDT, a leading agriculture retailer and manufacturer of specialty ag products, has acquired a majority interest in BAICOR, L.C. BAICOR, Read More
Soybean field
Industry NewsVerdesian Life Sciences Adds Vice President Of Business…
April 28, 2016
Verdesian Life Sciences has announced the addition of Marc Treurniet to the plant health and nutrition company’s management team. Treurniet Read More
ManagementBiotech Crops Developments and Millennials
April 28, 2016
Editors Eric Sfiligoj and Paul Schrimpf talk about the latest activities in biotech crops and a major shift in the Read More
Industry NewsNachurs-Alpine, Pathway Biologic Extend Marketing Agree…
April 28, 2016
Nachurs-Alpine Solutions (Marion, OH) and Pathway Biologic (Plant City, FL) announce an extension to their exclusive marketing agreement specific to Read More
MicronutrientsCharah Add Three Warehouses For SUL4R-PLUS Fertilizer
April 28, 2016
Charah, Inc., a total solutions company providing unparalleled service and innovation for the coal-fired power generation industry, announced today that Read More
Spenser Forgey, Yahama Fortix
FungicidesIndiana Farmer Wins Arysta LifeScience FORTIX Fungicide…
April 28, 2016
Arysta LifeScience North America recently presented Spenser Forgey, a grower from Young America, IN, with a new 2016 Yamaha Grizzly Read More
Corn Field
HerbicidesNew Wilbur‐Ellis Herbicide Targets Volunteer Corn
April 28, 2016
Wilbur‐Ellis Co., a recognized leader in marketing and distribution of crop protection products, as well as precision agriculture technology, has Read More
StewardshipNRCS To Help Farmers Measure Conservation Impacts On Wa…
April 27, 2016
The USDA has announced the availability of $2 million to help farmers install edge-of-field stations that monitor water quality as Read More
Planter in Iowa
EquipmentTop 10 Twitter Pics For #Plant16
April 27, 2016
Despite some wet weather in parts of the Midwest, growers and ag retailers are working feverishly to plant this year’s Read More
HerbicidesHELM AGRO Launches New HELM Sulfentrazone 4F Herbicide
April 26, 2016
HELM AGRO US, Inc. has announced the federal Section 3 registration of its new HELM Sulfentrazone 4F herbicide. Classified as a Read More
Valley Irrigation Valley 8000 series on corn
EquipmentValley Irrigation Receives Environmental Stewardship Ho…
April 26, 2016
Valley Irrigation has been recognized as a Groundwater Guardian Green Site by the Groundwater Foundation. The Groundwater Guardian Green Site Read More
Eric SfiligojMissing The Family Ties In Agriculture
April 25, 2016
By its nature, the agriculture market is cyclical. Up and down cycles come and go with a regular pattern. For Read More
HerbicidesHerbicide Resistance In Waterhemp Continues To Grow
April 22, 2016
Twenty-five years ago, waterhemp was virtually unknown to Illinois farmers. Today, the broadleaf weed blankets corn and soybean fields across Read More
ManagementIllinois Leads The Nation In 4R Certified Nutrient Mana…
April 22, 2016
As Illinois agriculture works to educate farmers about minimizing environmental impact and optimizing the use of ag nutrients, Illinois now leads Read More
Social media
Matt Hopkins7 Social Media Trends Shaping Ag Retail In 2016
April 22, 2016
After writing my last column on why social media is a must for ag retailers, I heard from several readers Read More
Industry NewsArysta LifeScience Adds Corey Abels To Midwest Sales Te…
April 22, 2016
Arysta LifeScience North America recently announced the addition of Corey Abels as Territory Sales Manager for the Midwest region. In Read More
Soybean Field
HerbicidesHELM AGRO US Unveils New Sheridan 25 WG Herbicide
April 22, 2016
HELM AGRO US, Inc. has announced the federal Section 3 registration of its new Sheridan 25 WG herbicide for selective Read More
ManagementCentennial’s Jim Fargo Talks Ag Retail
April 21, 2016
Special guest Jim Fargo discusses challenges facing this CropLife 100 retailer. Read More