HILLS, Iowa — The time-crunch during planting has been felt by countless farmers over the past couple of seasons, but they aren’t the only ones whose business might be affected.
Weather is a major factor for fertilizer retailers, as their schedules hinge directly on when farmers are wanting to plant, especially when it comes to spring applications of anhydrous ammonia.
“In the fall, it’s a customer here and there, but in the springtime, there’s a bigger demand to get the work done,” Richland co-op location manager Curt Mottet said.
Farmers have often been delayed due to weather in recent years, and it forces those managing cooperative supplies to be available at a moment’s notice. When plans change due to weather or transportation issues, this can drastically affect the bottom line for retailers.
Long hours aren’t uncommon for a co-op manager when a farmer’s plan changes.
“Farmers can change their mind right away and that can change quite a few things,” Mottet said. “We can help that by having enough anhydrous on hand.”
The reason for some of those long days comes from a lack of efficiency. While some of the extra hours can’t be avoided, additional delays can come from farmers changing plans at the last moment, said Tom Bayliss, vice president of wholesale fertilizer at Stutsmans.
He said farmers being able to give them as clear a picture of their schedule as possible is beneficial for the retailers going into the spring. While weather always plays a factor, being flexible and respectful of the retailer’s schedule will make it a win-win for both parties.
When it comes to transporting fertilizer, the spring creates a time and money crunch for retailers, the southeast Iowa retailer said, as they have “unlimited” overtime during those days. That allows them to get as much done as possible, but also stretches the budget of a business.
A factor that could significantly impact regions of western Iowa and Missouri is the closure of the Magellan ammonia pipeline, which supplies much of the Plains and western Corn Belt. The closure, due to profitability issues, didn’t come as a shock to many, according to a study done by Fertecon, an agribusiness intelligence firm.
In their study, “Magellan Ammonia Pipeline Closure: An Impact Assessment” published in July 2019, they said many producers and distributors have been making plans for this by increasing volumes of transportation in the form of trucks, train and barge movement.
“The Magellan closure will lead to increased ammonia transportation costs for much of the Plains region as well as increase the value of existing ammonia storage,” Fertecon wrote in its conclusion. “Already seasonally tight truck markets will be further stretched and there will likely be increased investment in ammonia storage in Kansas and Nebraska and to a lesser extent potentially Iowa and Missouri.”
Magellan was unable to be reached for comment.
Bayliss said many retailers try to take the shock out of the prices for farmers if there is a delay — for example, if an order coming by barge is stuck due to high river levels.
Delays could result in needing to store the product until next year, which devalues it and costs retailers extra on top. When they have to honor the price offered to the farmer, and the retailer is spending extra money on time and transportation of the product, it quickly lowers margins and might even result in the product selling for a loss.
Mottet said weather pending, this spring shouldn’t be nearly as much of a crunch in his area, as about 65% of their anhydrous went on in the drier November and December months.
“All I know is it’s going to be better (this year), unless we don’t get any opportunities at all until planting,” he said. “Then it could be stressful. But we got so much work done last fall, this spring is going to be easier.”