Crop Production Input Supply Issues

Fertilizer and pesticide supply issues have also been a concern for agriculture. Jay Vroom of Vroom-Leigh Agriculture LLC, and previously the president and CEO of CropLife America from 1998 to 2018, points out that the last pandemic was almost 20 years ago with the SARS-CoV-1 in 2002. Since then, world trade and travel have more than doubled.  “With regard to supply chain issues of concern to aerial applicators—which would span farm inputs like pesticides, seeds, fertilizers, fuel, and aircraft/parts, GPS electronics, and spray gear—I cannot think of one segment of those supply lines that is not more complex and sophisticated than 20 years ago,” Vroom said “More and more pesticide manufacturers and formulators have complex options to consider for constituent ingredients, and in the most simple products there are often dozens of inputs—from the basic chemicals needed as  feedstocks to synthesize the AI [active ingredient], to the carrier or inert ingredients.” “Price and quality of each separate ingredient are factors—along with uncertain availability,” Vroom continued. “Most every ingredient has been on a ‘just in time’ inventory scheme, with the aim of reducing cost to the supplier and eventually to the farmer. But all this works smoothly when everything works—and in the last 20 months lots of pinch points made everything not work more often than imaginable. Any one ingredient failure can stop the entire product.” Then there is China and the potential geopolitical problems regarding trade there. Industry experts estimate as much as 75% of active ingredients are produced in whole or in part in China. “In 2021, supply chain issues were buffered by products being in inventory, but now 2022 may be a bigger challenge,” said Jeff Tarsi of Nutrien Ag Solutions on a Farm Country Update webinar titled “Supply Chain Chaos” in November 2021.  Trucking issues (similar to those experienced by the fuel industry), structural issues at ports and changes in global uses of crop production inputs are all mentioned in farm press articles as contributing factors in 2021. “Supply chain issues take two to three years to correct,” meaning trouble procuring pesticides and other crop production inputs may continue in 2022, and possibly even 2023, Allen Gray of Purdue University said on the same webinar on agriculture supply chain issues. NAAA operator members have a variety of connections with the products that are aerially applied.  Some are intermediaries in the process and apply products that are recommended, provided for and invoiced to the grower by other retailers. Other operators retail the products they apply, and still others do a combination of retailing and applying products supplied by other retailers. 
Operators who act solely as an intermediary have limited control over what happens regarding product availability. Operators who retail the products they apply have much greater influence over product availability.  Whether you retail products or are an intermediary, it is important to be in touch with the product supplier to determine availability and the grower to determine their needs. This will allow for some planning of the season. If you find out that certain products are in short supply, take this as an opportunity to recommend other products that might be available and advantageous to apply by air.
One of the mitigation strategies mentioned in several farm press articles is using different active ingredients for pest control than the more commonly applied products that are more likely to be experiencing shortages. Some of these substitute products may need to be applied more often or require a timelier application.  Nitrogen fertilizer is more efficient if spoon-fed over the season. Aerial application has an advantage in these areas, and this advantage is being recognized nationally. “The most productive way to fertilize crops is via aviation,” said a fuel supply sales rep NAAA contacted.  Prices of crop inputs are up significantly. According to the Labor Department’s Consumer Price Index, energy prices are up 30% in the 12 months ending in October 2021. Farm commodity prices of crops that aerial applicators treat are up significantly in 2021 compared to 2020.  Soybean prices are up 40% and corn 50%. 
Historically, aerial applicators have done well during times of high commodity prices, even with high fuel prices. In the early 2010s, fuel prices were higher than they are now, and it was a time many aerial applicators expanded their operations to meet the increased demand for their services.  Vroom reiterated some of the points covered earlier and offered additional tips to manage agriculture’s ongoing supply chain challenges.  He said, “Given what we now know two years after COVID-19 surfaced—one could say it is a miracle that economic disruptions were not more severe—and the biggest good news of all is that farming and food systems were some of the most resilient of all the sectors of the global economy!” 

There is no silver bullet, but the simple answers are still rock solid:
  • Know your suppliers, have solid relationships. Talk to them early and often.
  • Do your homework, plan and get your orders in and whatever deposits made to secure your supply.  Have a plan B if the products in your plan A can’t be sourced.
  • Talk more with your farm customers to get them to plan so you can plan. Let them know that all that helps both of your businesses—explain to your customers how the strength of relationship you have with your suppliers helps the farmer—and better planning info is more important in this supply crisis than ever.
  • While supply chain problems cause difficulties, there are also opportunities.  Keep the lines of communications open. Aerial application is poised to assist growers who may be forced to apply less effective pesticides more frequently and timelier in order to protect their crops in the absence of preferred crop inputs. 

Updated February 2022.

This document is intended for NAAA members’ review only. It is not intended for publication. NAAA requests that should any party desire to publish, distribute or quote any part of this document that they first seek the permission of the Association.