This past Christmas, Curt Mottet did not spend his nights celebrating. The Richland, Iowa, location manager for Farmer’s Coop Association was instead dealing with the crunch of making sure farmers received anhydrous ammonia before a price increase went into effect at the beginning of 2019.
“I was here Christmas Eve night and Christmas Day night filling anhydrous tanks so we could get more product in,” Mottet said.
The price hike was a symptom of a wet ending to the 2018 harvest season, causing many farmers to fall behind on field preparations for 2019.
With a bump in spring demand, and the same seasonal supply of nitrogen, one of the major producers of anhydrous said it only made sense for prices to see a rise.
“We are market players,” said Darrin Boster, western Corn Belt regional leader at Koch Ag & Energy Solutions. “It’s all about supply and demand. If you have two concerts scheduled and the first one got rained out, so everyone tried to buy tickets to the second concert, does the second concert get cheaper? That’s exactly what happened last fall.”
Boster said the system they have in place for replacing quantities of nitrogen is designed for the product to empty in the fall and be replenished before the spring rush begins. Once that product is used, the process repeats in preparation for post-harvest field work.
He said the fact applications occurred in such a small window for many producers put extra pressure on the system, which is not designed to work that fast, he said. When product is being pulled from terminals, they are typically working around the clock to make sure supply is being constantly created.
With round-the-clock production, that meant more work for Mottet at his location. He would spend long nights at the terminal waiting for trucks to arrive.
Typically, applications are made when ground temperatures are 50 degrees or below. This year, Mottet said they were able to get some fields worked on, but rains in November severely limited the ability to add any anhydrous.
He said in December, they would make “frost runs,” running on an inch or two of soil crust that formed overnight in the colder weather.
“There were a lot of early mornings, or you’d wake up in the middle of the night and go out to try it,” Mottet said. “Basically you spun your wheels and didn’t accomplish a whole lot, but you were trying hard.”
Once snows came, Mottet said they weren’t able to get back into fields until the end of March and early April, when “all hell broke loose.”
“We couldn’t get anhydrous fast enough,” Mottet said. “It was 24-hours-a-day stuff, and the semis couldn’t keep up hauling it in here. We had farmers waiting in the lots (and) waiting for someone to show up so they could get a tank and put another 20-40 acres on.”
Mottet said there were multiple instances with at least three farmers waiting for product to come in. Whenever they would get a load of anhydrous during the day, it would be almost instantly gone.
This year saw people switch to other forms of fertilizer, such as liquid nitrogen or urea. While timing was certainly an issue, Mottet said the biggest reasons he saw farmers shift was due to the limited availability of anhydrous.
Despite being frustrated, Mottet said for the most part, farmers were understanding of the situation.
“We had warned them it might be like this,” Mottet said. “They were pretty accepting of what was going on.”
When needing to move such large quantities of ammonia in a hurry, there are a number of factors working against producers, such as finding the drivers to haul it.
Boster said Koch Ag and Energy does not have its own trucks and hires from the outside. One of the challenges they hear from the trucking companies is the hazardous materials license needed to transport ammonia, and the fact that many who do have that license are simply getting older and retiring.
“There’s not as much seasonal driver supply to pull in,” he said.
When looking to the future, Boster also said the decommissioning of the Magellan pipeline will cause some extra hurdles, though this fall shouldn’t be affected with terminals already full. The 1,100-mile pipeline connected Texas to the upper Midwest, with Magellan Midstream citing expense costs as the main reason for the shutdown.
Boster said his company is figuring out logistics for dealing with the closure for the upcoming years.
“We are working through all kinds of scenarios at the moment,” Boster said.
Mottet echoed the concerns over infrastructure to keep ammonia coming to terminals. While this year was an exceptional year for stress, Mottet said the supply issue isn’t new.
“There’s just not enough trucks to keep up,” Mottet said. “Farm machinery is so much bigger nowadays and everything is bigger and people go faster, and we are hauling it with the same size truck they had 30 years ago. We need more trucks and the manufacturer needs to improve their infrastructure to get out the gate faster.”