Supply chain remains fragile
The COVID-19 pandemic can shoulder much of the blame for the ongoing supply chain challenges we all endure. For most Americans and businesses, that impact started in early 2020 as the virus spread and lockdowns went into effect. Consumers were forced to switch buying habits and started stockpiling needs.
The system has seen both peaks and valleys over the last two years. If it were only the pandemic, the impact would most likely be significantly smaller. We all live and operate in a global economy that relies on high productivity rates in all aspects of manufacturing and distribution. Pre-pandemic, the supply chain was already at risk to any single material event.
This past year has seen weather influence natural gas prices around the world. Record winter storms across southern Texas in February 2021 and Hurricane Ida in August both disrupted production capacity for inputs key to agriculture.
Government policies have also affected product availability. China enacted regulations to reduce air pollution leading up to the February 2022 Olympics. This included shuttering coal, steel and chemical plants. These chemical plants produce active ingredients that are needed in herbicide and pesticide formulations in the United States. In the fertilizer industry, Russia and others are limiting exports to ensure their needs are met first.
Add this all up, and you have an agricultural inputs supply chain that is struggling to meet demand. Unfortunately, tight supplies also come with higher prices.
The MFA Team recognized the supply issues early and have been working over the past year to have product in place for the spring season. We believe MFA is as well positioned as anyone in our trade area. The tight supply, however, means product may not always be in place when we want it. A compressed season is a challenge any year.
Our consistent purchasing power puts us in a good bargaining position with suppliers. While there are no guarantees, we’ll use that to our advantage. Our membership in Tenkoz provides us additional options for crop protection chemistry.
From a fertilizer standpoint, our storage capacity at Caruthersville, Palmyra, Inola and our joint venture with Agri Services of Brunswick provides the opportunity to position plant foods now. A positive going into spring is the fair amount of fieldwork that was done this fall. Fertilizer tonnage was better than planned and nearly at record levels. This volume will help alleviate pressures when spring arrives.
Cooperatives such as MFA were formed for many reasons. Among those are the ability to improve bargaining power, to obtain products or services otherwise unavailable, and to improve product or service quality. While I believe MFA does each of those year in and year out, 2022 may be a year when we outshine our competitors with product availability.
One of our goals as a cooperative is to get product from Point A to Point B as efficiently as possible and add value along the way. In some cases, the product and delivery could be different, but we are committed to reaching that goal. We understand we can’t be successful as a company if you aren’t successful in your operations.
If you haven’t made plans with your input providers, I suggest you do that soon. The supply shortages are real. Careful planning will help alleviate in-season surprises. Specific details can be obtained through your local MFA contacts. Supply chain challenges will also be a topic at our spring delegate meetings being held March 7-11.
Supply shortages are being felt in the grocery stores, too. It’s not because farmers and ranchers have stopped raising crops or animals. I’m confident in that. You continue to be committed to doing your part in providing food, fuel and fiber for a better world.
There are many quotes that highlight the importance of farmers and ranchers. This one by Brenda Schoepp may be my favorite: “My grandfather used to say that once in your life you need a doctor, a lawyer, a policeman and a preacher, but every day, three times a day, you need a farmer.”
Thanks for all you do.
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