As I write this column, I’ve had the opportunity to dive deeply into the results from the latest CropLife 100 Mid-Year Survey. How are some takeaways.
Overall, the nation’s top ag retailers believe that 2021 will be a “great year” for agriculture — unlike 2019, when wet weather kept some 19 million acres of cropland from being planted, and 2020, when the COVID-19 pandemic disrupted the normal flow of life around the globe. In fact, 55% of respondents to this year’s mid-year survey think 2021 will rate between an eight and a 10 on a 10-point scale. This represents a vast 20% improvement from the number of ag retailers that believed this would be the state of agriculture in the 2020 CropLife 100 Mid-Year Survey.
Better still, the majority of survey respondents say that the aftereffects of COVID-19 on their businesses so far in 2021 has been relatively minor. However, finding/keeping good employees has remained an issue for many CropLife 100 companies — a situation made somewhat worse because of lingering COVID-19 worries, say respondents.
Of a bigger concern right now for CropLife 100 ag retailers are supply issues. According to most analysts, unprecedented steel demand during the first quarter of 2021 has already significantly pushed up prices. In fact, U.S. benchmark hot-rolled coil steel prices are now sitting at around $1,500 a ton — a record high that is nearly triple the 20-year average.
Because of this, some ag equipment manufacturers are already rising concerns over the steel situation. For example, John Deere has noted steel price concerns in its corporate outlook for the year, saying that surging steel prices and elevated freight rates could cost the company $500 million by the end of fiscal 2021.
Of a greater concern, however, are the supplies of such popular herbicides as glufosinate and glyphosate. According to many CropLife 100 ag retailers, these are suddenly in short supply/costing more to obtain. In the survey results, many respondents blamed market disruptions from COVID-19 fallout for part of the problem.
And according to SPM Biosciences’ David Li, a contributor to sister publication AgriBusiness Global, there are other issues also impacting global supply of these herbicides, including many in China. “In 2020, the Sichuan flood hit the Fuhua glyphosate production,” wrote Li in a recent column. “From August 2020, the glyphosate AI price went up step by step. The suspension of Fuhua’s glyphosate production caused a significant gap in supply, the impact of which has been consistent in 2021. Up to 60% of suppliers are located in Hebei Province and Shandong Province.”
So as most times in life, there is good news and bad news for ag retailer as 2021 hits the midway mark. A clearer picture of how the year actually plays out for agriculture should come from the results of our CropLife 100 Survey in a couple of months. As always, stay tuned . . .