What Growers Need to Know – Availability & Pricing of Fertilizers/Pesticides for 2022
by Stuart Spencer
On January 4, Renee Pinel of the Western Plant Health Association (WPH) updated Lodi growers on the availability and pricing of fertilizers and pesticides moving forward. She discussed “the perfect storm” of weather, trade disruptions, geopolitics, pandemic shutdowns, labor shortages, and supply chain delays leading to decreased availability and increased pricing. WPH represents 90% of all fertilizer and crop protection companies in California, Arizona, and Hawaii.
Pinel highlighted how supply-side disruptions combined with demand-side increases are leading to limited supply and increased pricing. She noted that US demand and pricing are driven by Midwest corn and that there is an 85% correlation between the price of corn and the price of fertilizer. She also noted that in February 2021 the USDA increased the forecast price for corn leading to farmers planting more corn and thus increasing demand for fertilizers and pesticides.
What the long-term outlook is, is a bigger concern and question! What portion of price increases is due to short-term disruptions and what portion is due to inflationary cost increases? It is becoming clear that supply chain disruptions, labor shortages, and government policies are leading to increased wages, increased input costs, and overall inflationary pressure. These underlying cost increases are not likely to dissipate, and growers need to be factoring in these cost increases in any contract negotiations with wineries.
In the short term, Pinel had several points of advice. Start planning now, review historical purchase needs, work closely with your suppliers, recognize ongoing delay issues, and consider ordering early and storing products.
The Lodi winegrowing community may contact Dr. Stephanie Bolton, Grower Research & Education Director, for a PDF copy of Pinel’s slides: stephanie@lodiwine.com.
