Buy $900 DAP. I'm trying to find a marginally acceptable way out of the fertilizer pricing mess we seem to have found ourselves in. I like my dealer and I respect the right of the fertilizer industry to make business plans for their own ends. But it has become glaringly obvious what the industry wants to force customers to do: underwrite their unfortunate business decisions.
As the boys at Purdue delicately put it:
Fertilizer markets are adjusting now to a dramatically different economic situation after prices reached"Somebody, by God, is going to buy this overpriced inventory of mine", they seem to be demanding. Dire warning of yield drops and inability to get product in time are transparent scare tactics. And they know a few good-hearted souls will honor our previous contracts and miscalculate that our share lease at least splits the pain with some hapless landlord.
unprecedented levels last year. With prices in flux, the wholesale prices paid by agricultural retailers vary
dramatically, depending greatly on the fertilizer source and when they were purchased. Correspondingly,
retail fertilizer prices can be much different from dealer to dealer this year. As in any year crop producers
should check pricing with more than one dealer, but also especially this year get a good feel for the assurance
of supply when you will need fertilizer this spring. Also, carefully weigh the value and possible future benefits
of maintaining a good working relationship with your agricultural supplier. [More]
But what never seems to cross the minds in the boardroom is farmers know there is a sale coming this summer. The presumption we are slaves to habit and will pony up because we always have may be partially right, but it will not include this producer. They seem to forget I have my own bad decisions to rectify. I'm not in the mood to solve their problem.
I value my relationship with my retailer, and I suspect he is the sacrificial pawn in his company's effort to make regional and local dealers be the fall-guys for corporate misjudgments. And I will honor my 2008 contracts and prepays for NH3 with a pretend smile on my face.
But someone else can overpay for P & K this spring. I think I can apply twice as much this fall for the same money. In fact, I wonder if I can prepay it right now.
I have seen the earning guidance given by fertilizer manufacturers desperate to look profitable in front of extremely skeptical stock analysts. (Do they think we can't find this stuff on the Internet?) And we all have read/heard the stories of same-county competitors $500+ apart because only one was choking on overpriced inventory.
This is not the year to go into any market place with "demands". Not for producers. Not for fertilizer sellers. Conflict with customers is soooo 2008.