Leveling The Playing Field on Crop Inputs

June 21, 2012 11:26 AM
 

When fertilizer prices exploded in the fall of 2008, risk on the input side of your business blew up along with those crop costs. At that time, fertilizer dealers were caught holding huge amounts of high-priced inventory just as farmers backed away from the market. That changed the market forever.

Most fertilizer dealers now don’t hold inventory — they send orders to suppliers only when customers place orders (and pay ahead). That change in how fertilizer retailers manage their inventory changed the structure of the market, adding volatility to prices. And with volatility comes opportunity. On one hand, you now have more opportunity to lock in attractive prices and delivery periods — but you also have more opportunities to make purchases at exactly the wrong time.

After watching the new structure of the fertilizer markets the past few years, many Pro Farmer Members have asked for help in identifying "good" and "bad" pricing opportunities. And now we’ve got the product and the process to help.

Bringing transparency to the market
You told us you want and need clarity in the crop input markets and to do that we’ve enlisted the help of hundreds of ag-retailers throughout the Midwest. They’re helping Pro Farmer shine a light on fertilizer and fuel prices. We have a team surveying retailers each business day to gather and update as many fertilizer and fuel prices as possible. The results are published online in a way that provides both buyers and sellers with an anonymous method to check high, low and average prices for key inputs.

The price-discovery system of Inputs Monitor is very easy to navigate. Just click on your crop district on the map and it will take you to a page displaying the high, low and average price of the nine crop inputs we update each week. This is timely and locally relevant information — all price quotes expire after 30 days and each table summarizes your selected Crop District and state. And if a Nebraska corn grower is curious about an Ohio grower’s fertilizer and fuel costs, you can check that out, too.

Our Inputs Monitor price survey already includes more than 300 retailers in 12 Midwest states. As the information gains density and more history, we will start offering charts and graphs for your local input costs in much the same way that we currently show graphs for economic trends and the futures markets for agriculture commodities.

Inputs Monitor will include specific advice
We’re enlisting plenty of help to analyze trends in the fertilizer and fuel markets, and we’ll summarize that analysis in easy-to-follow (and specific) buying advice. It’s tough to break the analysis down to regional advice, but if we see regional opportunities, we’ll bring those to your attention, as well. We’ll treat the advice for inputs the same as Pro Farmer handles ag market risk advice: We’ll give you all the information, analysis and perspective needed to make a good decision on your own, and then add our advice and back it up with fundamental and technical arguments.

It will be your spot for fertilizer industry news
Only the important "stuff." Your time is valuable... we know that. That’s why PF newsletter includes only the news, information and analysis we think is important. We’re a "human filter" on the mountains of news that hits the grain and livestock markets every week. We’ll do exactly the same in Inputs Monitor. Don’t expect a huge volume of fertilizer industry news when you come to the site, but you should expect to see the news that really matters.

Grain market coverage (with a twist)
Most fertilizer analysts realize the price of key crop inputs like nitrogen, potash and phosphorus follow the price of corn. More specifically, these input prices follow revenue potential from corn. There is a short lag as fertilizer prices follow corn revenue higher... and a much longer lag following corn revenue lower. Grain market coverage in our Inputs Monitor will feature revenue charts for each of the major corn-growing states. That will bring some perspective as to what price regional markets will accept without disrupting overall demand for these key products.


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