Credit crunch tightens up glyphosate supply

Date:01-31-2022

An input supplier says importers must now pay 25 percent of their glyphosate order when the deal is made and the rest before the product is shipped, rather than 30 to 90 days after arrival the way it used to be done.

U.S. plant pathologist thinks many farmers will resort to tillage this year because of a glyphosate and glufosinate shortage
Glyphosate supplies will be tight in Western Canada this growing season but not for the reasons many have been citing, says a retailer.

“The real thing that is slowing the shipment of glyphosate into Canada is tight credit terms,” said Joel Merkosky, partner with Johnston’s Grain.

He can get as much product as he wants from his suppliers in China. That’s not a problem.

But the price has tripled and instead of paying for the product 30 to 90 days after arrival in Canada, he is being forced to pay 25 percent at order time and the remainder once it hits the water.

Merkosky has 250,000 litres of product in transit from China. If he had more credit available he would have doubled that amount.
He believes the end result of the credit crunch is going to be tight supplies and high costs in Western Canada from spring through fall.

“You might even run into a shortage situation for some guys who are spraying in-crop and guys looking to spray pre-harvest,” he said.

Merkosky has heard it’s a similar situation for another popular farm chemical.

“It sounds like there is not going to be anywhere near enough glufosinate this year to cover the amount of LibertyLink acres that are going in,” he said.

Farmers who require two passes of the broad-spectrum herbicide might be out of luck.

David Esler, senior vice-president of North American retail for Nutrien Ag Solutions, said Hurricane Ida and the energy crisis in China have had an impact on global crop input supply.

“Fortunately, because of our position in these markets and our broad portfolio of solutions, Nutrien Ag Solutions is confident in our ability to meet customer needs going forward in 2022,” he said in an email.

“Sometimes that may mean pivoting in which inputs our agronomists recommend to our growers, but with careful planning and long-standing relationships, we do not anticipate this having negative impacts on growers’ yields or profitability.”

Bill Johnson, professor of botany and plant pathology at Purdue University, said the situation is pretty grim in the United States.
He estimates that more than 90 percent of U.S. farmers have not yet lined up their glyphosate supplies for the upcoming crop, which is highly unusual. Normally about three-quarters of farmers would have pre-booked their needs by now.
“Glufosinate is even worse,” he said.

Johnson believes farmers are going to be pulling out their tillage equipment this year.

“We’re going to lose a lot of the no-till acres to take care of the weed control before planting,” he said.

Johnson estimates that about 70 percent of the soybean crop and 25 percent of the corn crop is usually no-till in the United States.

He said a number of factors contributed to the glyphosate shortage, including Hurricane Ida, which shuttered Bayer CropScience’s production facility in Luling, Louisiana.

Rising energy prices in China are driving up the price of yellow phosphorous, a key ingredient in the production of glyphosate and glufosinate.

And then there are the myriad of supply chain and logistical issues that are plaguing almost every internationally traded commodity.

Johnson said this will be the second consecutive year of glyphosate shortages in the U.S. Many retailers only received 60 to 80 percent of their normal supply in the 2021 spraying season.

Farmers who needed to spray their crops more than once were caught in a bind.

“They were scrambling around to find glyphosate to make that second or third trip through the field if they were a no-till producer and they were using it for burn-down and post (emergent) weed control,” he said.

Heading into the fall of 2021 there was a severe shortage of product that caused “hysteria” in the farm community.

Johnson said U.S. retailers are assuring producers there will be product come spring despite having minimal supplies in the system right now. He believes they are trying to prevent the same type of panic as last fall.