There's got to be a better way - PAC Report
- By: "Farm Tender" News
- Farm Tender, DelayPay & Farm Inputs
- Jun 29, 2023
- 942 views
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By Ellen Garland
The last 2 weeks have been a whirlwind in the Fertiliser game. I recently read an article titled "The Boy who cried Urea". Have a read here.
The number of times I've passed on advice from suppliers to Growers that supply is tight and there is an urgency to lock in required quantities. This has always come back to bite me because the price has come back, and there are no issues with supply.
But with the current Urea shortage we are dealing with, this one took everyone by surprise. Conversations that I had with suppliers at the start of June indicated that there was more downside to the Urea price, and there was no panic to lock it in. With the prediction of a dry winter, understandably, Growers were reluctant to secure any until they knew where things were headed. Suppliers didn't want to be stuck with stock in a falling market, and resellers didn't want to be the ones left "Holding the Baby", so to speak.
When we realised that things weren't looking great, like a lot of other resellers, we went into overdrive. Calling suppliers, resellers and anyone that may have had any Urea available at all.
It got me thinking, "How can we do this better?". There seems to be such a divide between the Supplier and the end user, with little communication on how the Fertiliser industry can ensure that there is enough supply when needed. Dwain also wrote about it in the "Daily" this week.
What I have discovered is that WA is ahead of the game. I'm sure there is more involved, but what I know about how they manage supply is the majority of WA growers have committed to at least 80% of their APs and 50% of their Nitrogen by the end of December, and they are only committed on volume. So how does the Grower not get the raw end of the deal when it comes to pricing? Well, over the last 20 years, this has mainly been built on a trust system. The Suppliers have built a relationship with the Grower, ensuring that they will not be paying well over the current market price. It's not foolproof but has ensured there is no shortage of Fertiliser. There are also companies like CBH that keep the pricing for other suppliers honest.
With what we have experienced with supply over the last couple of years, something needs to change.
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