Micronutrient Outlook Provides Grounds for Cautious Optimism

The micronutrients industry, while cognizant of the agricultural turmoil being created by a poor growing season and U.S. trade disputes, maintains a cautious but optimistic eye toward the remainder of this year and 2020. That is the consensus among 15 micronutrient companies interviewed for this story.

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Speaking on behalf of their own companies, several officials capably summed up the majority mood of the industry:

“We expect micronutrient demand to stay strong,” says Brian Haschemeyer, Director of Discovery and Innovation with BRANDT.

“All indications are for increased demand and growth of our performance products in 2020,” says The Mosaic Co.’s Director of Performance Products Tom Fry.

Micronutrient Outlook Provides Grounds for Cautious Optimism

Roach

Adds Tommy Roach, Vice President of Product Development and Technical Services with Nachurs: “Soil-applied micronutrient sales have continued to grow in recent years, and this year was no exception. As growers continue to push for higher yields, they see micronutrient utilization in an overall balanced fertility program as an effective means to achieve this. The trend for micronutrient usage will continue to grow, both in soil-applied and foliar-applied.”

Sellin’ in the Rain

USDA reports that approximately 300,000 planned acres of soybeans and more than 5 million planned acres of corn never materialized this growing season because of wet and cool weather across much of the U.S. How has that affected micronutrient companies?

Micronutrient Outlook Provides Grounds for Cautious Optimism

Edgington

Advanced Micronutrient Products: “We saw only marginal reduction in demand during the spring of 2019. Multiple sources noted that farmers’ planting intentions remained strong in early June, and dealers were ready to supply any and all fertilizers, no matter what the crop. There were areas that were the most severely impacted by the rains that did not take product as intended, but others filled their warehouses as the planting window grew short.” — Dale Edgington, Procurement/Production Manager

Agro-K: “The majority of acres in the Western Great Plains did get planted; however, most are at least 14 days behind normal. A wet spring did expose leaching of boron and sulfur. With the crop being behind, it actually allowed foliar micronutrients to be applied ahead of the normal growth stages.” — Rob Ford, Midwest Sales Manager

The Andersons: “All in all, we were pleased with the spring, given the conditions. Several of our micronutrient products can be applied at planting or as a foliar application. Given this versatility, we moved product to planted areas so growers could use the micronutrients to prevent or correct a nutrient deficiency or combine these products with their pesticide applications. Having this flexibility with our products helped to manage our inventory levels as well as produce a better crop.” — Tony Donoho, Director of Sales, Specialty Nutrients

Aqua-Yield: “(We have) not seen a reduction in micronutrient sales.” — Clark T. Bell, CEO

Azomite Mineral Products: “It has not been a real factor for us this year.” — Jim Phillips, President and CEO

BRANDT: “The Midwest floods pushed back planting dates, and a lot of re-planting was done. While this delayed early-season micronutrient applications, we saw an increase in demand for our new enzyme technology, which contains zinc and is applied at planting. The technology boosts soil health, encourages germination and rooting, and generally helps get crops off to a strong start. This was especially important this season with the late planting and re-planting.” — Haschemeyer

Concept Agri-Tek: “The reduction in acres, along with just poor crops that farmers do not want to spend money on, have hurt our sales in the Midwest. But from coast to coast we have actually increased our micronutrient sales by over 40% year over year, with more coming in August this year than ever before.” — Trey Curtis, Owner/President

Micronutrient Outlook Provides Grounds for Cautious Optimism

Byford

Helena Agri-Enterprises: “Despite several key areas of the country experiencing planting delays and reductions in planted acres, we continued to show positive gains in our crop nutrition and fertility programs.” — Josh Byford, Brand Manager, Nutritional and Coron Brands

Miller Chemical and Fertilizer: “We have not seen any significant reduction to date in our micronutrient sales due to the specialty nature of the mixed blends we offer.” — Randy Edwards, Vice President of U.S. Sales

The Mosaic Company: “There has been a slight reduction in MicroEssentials SZ and Aspire compared to this time in 2018, but the decrease is in line with the reduction in planted acres. Overall across North America, sales of Mosaic’s performance products remain strong, with 2019 shaping up to be the second-largest in company history across our performance product portfolio.” — Fry

Micronutrient Outlook Provides Grounds for Cautious Optimism

Reimche

Nutrient Technologies: “(We are) based in the western United States and therefore have not faced the same level of challenges as others regarding the fluctuation in planted acreage and crop mix. However, crops in the Western states have had challenges this season, including cooler and wetter spring weather, the impacts of tariffs on exports, as well as market factors negatively impacting pricing. These challenges have resulted in producers reevaluating their spend on micronutrients. The onus remains on retail and manufacturers to explain how a robust micronutrient program can positively impact a producer’s return on investment.” — Jeff Reimche, Director of Technical Operations

West Central Distribution: “The number of prevent plant acres are going to be at an all-time high this year. This means that all nutrient sales, not just micronutrients, will be lower in some areas of the country that were affected more by prevent plant claims. West Central has continued to see a significant demand for micronutrient despite the decrease in planted acres. Due to geographic diversity, our sales are up in some areas that have seen good growth and lower in other areas with more prevent plant claims.” — Paul Gerdes, Proprietary Products Manager

Micronutrient Outlook Provides Grounds for Cautious Optimism

Gilbert

WinField United: “The unusually high amount of prevented-plant acres due to weather conditions this year has resulted in a difficult year for many farmers, and, as such, we’ve seen a slight impact on micronutrient sales. For our farmers who have prevented-plant acres, we’re recommending they work with their agronomist to understand what the implications for next season might be. Starter fertilizers that contain phosphorus or zinc are a good option if they’re planning to plant corn next season on ground that was left fallow this year. Soybeans seem to be less sensitive to fallow syndrome, so farmers may choose to switch up their rotation.” — Brant Gilbert, Director of Marketing

‘Keeping a Close Eye’ on Tariffs

Compared with weather-related concerns, micronutrient companies, in general, appear more wary of the ramifications of U.S. trade disputes with several countries, in some cases resulting in tariffs. In the words of The Andersons’ Donoho: “We are monitoring the situation as best we can. We have altered our purchases as needed to ensure supply.”

Advanced Micronutrient Products: “The tariffs on imports was initially good news. We had suffered from what might be identified as ‘dumping’ in the U.S. market the previous two years. Some fertilizers from China were being imported and sold at less than the cost to produce in the U.S., while the reported prices for those same products was higher in China. The tariff helped to level the playing field. But over the succeeding 12 months, the Chinese Yuan has devalued and effectively neutralized the tariff. And, so, we are back where we started. Some selective Chinese imports are less expensive than other sources. For a time, Brazilian materials were very cost effective but have since given way to those from India. The market eventually levels out, and those that are our customer one day become our supplier the next. — Edgington

Agro-K: “Through good planning and early ordering, Chinese tariffs did not materially affect sourcing and product pricing for the 2019 season. Micronutrient sourcing and pricing for the 2020 season at this point appears to be more challenging.” — Chapman Mayo, President

Aqua-Yield: “We’ve had to locate a new source for zinc because of the U.S./China trade war. We have an agreement in place for two more years.” — Bell

Azomite: “Our naturally derived deposit is located in the U.S., so the sourcing has not been a problem. The trade tensions affect our business — as they have all of the agricultural sector.” — Phillips

BRANDT: “We have seen an increase in the cost of some raw materials. We’ve tried to limit the impact this has on finished goods.” — Haschemeyer

Concept Agri-Tek: “Since most all of the EDTA comes out of China, we are expecting an increase for micronutrients for 2020.” — Curtis

Helena Agri-Enterprises: “We’ve always tried to be multifaceted in our approach to sourcing raw materials and nutrient sources. We work closely with our manufacturers to provide them timely and updated feedback to ensure our needs can be met.” — Byford

Miller Chemical and Fertilizer: “We do not source Chinese micronutrient raw materials nor have we witnessed any disruption due to the trade issues.” — Edwards

Mosaic: “No effect.” — Fry

Nachurs: “The ongoing trade war with China has caused micronutrient raw materials to increase. As a result, some domestic suppliers have decided to take advantage of the price hike to strengthen their profit margins as well.” — Roach

Nutrient Technologies: “While the increased prices of ingredients from China eroded some of our margins in 2019, there were no immediate advantages to changing those sources of ingredients during the season. This may change if the trade war remains unresolved, but we continue to use an extensive network of ingredient suppliers that meet our quality, value, and sustainability objectives.” — Reimche

West Central: “The current tariff situation technically has had minimal impact on micronutrients but is driving marketplace uncertainty into both costing stability and purchase timing of these materials and products.” — Gerdes

WinField United: “It has not impacted our current inventory, but we’re keeping a close eye on any impacts on products as we head into the 2020 crop year.” — Gilbert

Micronutrient Outlook Provides Grounds for Cautious Optimism

Watts

Yara North America: “So far there is limited impact to Yara; however, our formulations take the highest quality of raw materials (often pharmaceutical), which are already at a premium to the market. Even at the more ‘commodity’ level of micronutrients, there has been limited upside due to the trade war.” — Debbie Watts, YaraVita Product Manager

‘Cautiously Optimistic’

Looking toward 2020, micronutrient officials are “cautiously optimistic,” according to Advanced Micronutrients’ Edgington. “While some dealers have carryover stocks to consume in the fall, others are projecting that reduced acres and reduced yields in 2019 will cause commodity prices to increase,” he said. “This will, in turn, cause farmers to work to maximize yields next year. Farmers may have been hit hard by this year’s weather, but they also know that the only way to recoup their losses is to maximize their yields and net incomes next year. This weather-induced fallow offers a unique opportunity to intensively soil sample and to look for hidden hungers that can be corrected for next year’s crop and beyond. I would encourage all to either selectively or intensively soil sample and analyze for micronutrient deficiencies. Top yields need more than N-P-K.”

As for other companies:

Agro-K: “The biggest change expected in 2020 will be acres shifting to alfalfa and away from corn.” — Ford

Aqua-Yield: “We are expecting 2020 to be a banner year for Aqua-Yield and for all of agriculture. We are placing a lot of data, assumptions, and weight in projections from the Farmer’s Almanac and a three-year comparison of weather.” — Bell

Azomite: “There are and will always be challenges — and that goes for every industry — but with every challenge comes opportunity. The farmers and ranchers in the United States are a very resilient group. — Phillips

Concept Agri-Tek: “Commodity pricing will be key. If the trade war gets resolved and prices go up, then 2020 will be stellar. Also, we believe that the USDA estimates on corn are way high. After harvest has been determined, we feel there will be a good run up in corn, and beans will follow. Again, with our new technologies and performance, we are forecasting another double-digit sales increase for 2020. — Curtis

Miller Chemical and Fertilizer: “We see a relatively flat market in 2020, with some increases in specialty crop areas where demand for more efficient micronutrient blend offerings are required.” — Edwards

Nutrient Technologies: “(We have) a positive outlook for 2020. Although it is difficult to predict the future sociopolitical environment, impacts of global trade, or weather events in the upcoming year, we believe that producers and retailers will be focused on providing the highest-quality product to their consumers.” — Reimche

West Central: “There has been some strengthening in commodity prices over the summer. Mother Nature has also allowed some poor-condition crops to come around, but average yields will be off this year due to late planting and prevent plant claims. With the potential for a stable to strong corn-based commodity price, the outlook could drive strong nutrient usage into 2020. … We will also continue to manage these crops more definitively using precision agriculture to apply nutrients. This will help create a positive long-term outlook for micronutrients in production agriculture. For example, a grower might be apprehensive to spend $10 per acre on micronutrients when he has to apply them uniformly across 1,000 acres. That is a $10,000 investment with a varying degree of return on investment (ROI) across the field. But if he knows he can spend $25 per acre on 40% of those acres and have a high rate of return on that investment, that is a positive outlook. I believe this precision technology will drive more micronutrient sales in the future.” — Gerdes

WinField United: “Escalated corn prices and the addition of more corn acres in 2020 give us a bullish outlook on our micronutrient and plant growth regulator business leading into the crop year.” — Gilbert

Yara NA: “Yara remains optimistic for growth on micronutrient application. Despite the challenges that the growers are having, which are huge in many regions, the added benefit that balanced crop nutrition brings to yield is becoming better understood and practiced.” — Watts

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