Fertilizer Logistics: Insight Into Getting It Right This Planting Season

ADM Fertilizer Logistics Image 1

An extensive distribution network is behind the fertilizer logistics business. Photo courtesy: ADM

Spring is upon us and farmers, suppliers, and transporters are all busy preparing for the planting season, which includes lining up fertilizer supplies and accurately estimating inventory needs. Due to the hustle to get ready and some global inventory imports coming into the Gulf Coast slightly behind schedule, the 4Rs (right place, right time, right product, and right rate) are a high priority for our industry right now.

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Right Place

Prepping fertilizer for the North American spring season requires planning, contracting, staging, and execution to have the right product in the right place for end-users. Most of the nutrients applied to crops in the U.S. and Canada are moved by vessels, barges, and railcars months in advance. Proactive planning and coordination are key to logistically transporting fertilizer from global and domestic supply origins to retailers and farmers across each state.

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Right Time

 A vast footprint and extensive distribution network are behind the fertilizer logistics business. At ADM, we are proud to be able to serve this industry with a best-in-class footprint. The collective workings of our industry are responsible for bringing nutrients to farmers in time for spring planting. Below are insights into the current transportation conditions and inventories, and how our team is adjusting to help farmers in our local markets:

  • River Conditions: A promising spring season seems to be shaping up on the river. If the weather continues to cooperate and there are no major rainstorms or monsoons, there will be a successful start to the planting season across many regions. One underlying concern is a vessel delay by the New Orleans area since there is a high volume of nutrient imports coming in for distribution.
ADM Fertilizer Logistics Image 2

A promising spring season seems to be shaping up on the river. Photo courtesy: ADM

  • Rail Conditions: In February, railcar movements greatly slowed down due to the extremely cold weather in Canada and throughout most of our country, even in unexpected areas like Texas and Oklahoma. At that time, it created delays in fertilizer shipment and car placements by as much as 12-17 days. In response, ADM expanded its railcar fleet and created additional railcar loading locations to continue filling the necessary fertilizer inventory.
  • Truck Conditions: Truck shipments are consistently active during the first quarter. In recent months, grain prices have fostered strong selling activity in feed markets and domestic processor and export markets. Therefore, these large volumes of grain have pushed freight teams to develop new haul strategies, which has opened opportunities for fertilizer groups like ADM. The increase in fuel values has meant higher freight rates across most markets, but by staying on strategy, ADM has found ways to insulate against freight risk exposure. We’ve also built out a reliable truck fleet, so we can respond and handle any last-minute shipments of spring fertilizer.
  • Fertilizer Inventories: Overall, inventories across the industry seem to be on target, but the main risk continues to be the amount of inbound product that will likely come in over the next few weeks, causing extra pressure to move the product to interior markets in time. One other risk to current inventories is the amount of nitrogen production that was lost during the February storms, which may also have an impact.

ADM Fertilizer Terminal Locations Map

Right Product

A diverse product offering is the key to meeting the needs of the North American grower. This requires significant risk management by retailers who work with suppliers and distribution partners like ADM to manage risk across a large suite of products. At ADM, we use the paper market, offtake contracts and long-term relationships to help position the right products at the right time. This is why ADM has partnered with companies like Fibrant for high-quality sulfate out of Belgium, with a low metal profile, or with PhosAgro and Ma’aden to bring in low cadmium products.

Right Rate

It’s now more important than ever to apply the right rate of product at the right time. With the historic move in pricing across most major inputs, it’s instrumental that trusted logistics partners can help manage your shrink costs, quality of products to minimize loss, and an ample supply to ensure optimal blends and usage for varying crop needs. We work with established terminal operators along with ADM-Artco to ensure the moving and handling of these products are efficient and reliable.

The logistics business heavily relies on multiple modes of transportation and a series of process steps, so farmers are ready to go for the planting season. As the current market continues to call for just-in-time inventory, it’s imperative that farmers and retailers work with a supplier that can capitalize by accelerating the monumental movement of fertilizer through the involved supply chain.

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