The year 2022 has been a year full of unique challenges. We’ve experienced record-high ocean freight rates, hurricanes impacting vessel shipment lead-time, United States manufacturing facilities shutting down, Russia invading Ukraine, record-high diesel fuel costs, labor shortages across the supply chain and significant price variability throughout the season than ever before.
Looking Ahead at the 2023 Growing Season
Because of the many “firsts” for our industry we faced in 2022, much uncertainty remains for the 2023 season. Inflation, increased interest rates, geopolitical risks, continued labor issues and the uncertainty around commodity markets add to the challenges we face in the ag industry. China continues to have rigorous protocols around Covid-19 which could lead to labor shortages if a significant outbreak occurs.
The Outlook for the Corn Market
Glyphosate will most likely still be in a managed supply status, meaning we’ll have to take as much volume as possible early, but expect portions of the needed supply to come in monthly allocations. There simply isn’t enough supply to cover all of the United States retail market needs, or that can ship before the 2023 season. Price may soften but don’t anticipate significant drops in pricing in the short term.
The glufosinate market in the United States may be plateauing as we enter the 2023 season, but global demand for glufosinate is expected to continue to grow. Because of the continued demand for glufosinate, expect supply to be allocated for the 2023 season.
Corn residual herbicide supply should be manageable, as long as we plan early and order accordingly. Our additional tank capacity at our Latty Agronomy campus should help tremendously. With the expansion project, we can load most of these products ahead of the 2023 season with supply plans, based on previous history and expected growth.
The Outlook for the Soybean Market
Shifting to the soybean market, the demand for products containing clethodim have reached record highs in 2022, and the expected demand for 2023 remains strong. With that said, potential supply constraints in China and India could put more pressure on United States supply; early ordering will be key to help us get as much supply ahead of the season and signal future needs as the product will most also likely be allocated.
Looking at the fungicide market for 2023, it looks like supplies will be tight but manageable. Once again, early planning helps ensure supply.
Developing a Primary Plan Specific to Your Farm
What does all this mean for growers in our area? It highlights the importance of building farm plans with your Mercer Landmark Crop Production Advisor as early as possible. The old habits of buying seed at one time, followed by discussions around herbicide programs and then a later decision around fungicides and plant health products will most likely lead to supply shortages. We’re doing our best to manage supply based on historical trends, but the best supply plans are based on field-by-field planning with your trusted advisor at Mercer Landmark. We also encourage building contingency plans as well. If unexpected supply shortages impact your first product of choice, it’s a great idea to have your “Plan B” in place as well.
While there’s always some risk in making early commitments, there’s even more risk as it relates to supply if you take the “wait and see” approach. As you start making supply plans and commitments, it will be equally important to reach out to your Mercer Landmark Grain Marketing Advisors to build plans to cover your costs and lock in margins for your farm.
The Good News
With Mercer Landmark’s upgraded facilities, additional storage for key products and knowledgeable staff focused on helping our customers to maximize yields and profits while limiting your risk, we’re positioned well to have a successful 2023 season. The most important factor will be the partnership that we have with our customers and the joint planning that will help us to have the supply of the products needed to help your crops reach their full potential. We sincerely appreciate your business and look forward to working with you to build a farm plan that fits your needs and helps you achieve your yield and profit goals for the upcoming season.