July Market Update
I don’t think we’ve seen for a number of years such a variance in weather conditions across our network as we are currently. In the northern Eyre Peninsula it’s cut off, things are very dry and with in-crop spraying completed they are looking to shut the gate on the crop. Meanwhile across parts of Victoria, especially those South of Horsham, growers are still saying it’s too wet and can’t get on paddocks to spray in-crop or apply nitrogen. It’s a good reminder that no two years are the same and it’s what keeps the agricultural industry a constant challenge.
In the chemical space we’ve seen most actives slowly coming back in price over the last 6 months and last month we wrote how positive that was for input costs and profit margins. Since our last article glyphosate and paraquat have bounced off their June lows as inventories were depleted. Our direction to growers in June to lock in stock and to expect price rises ran contrary to our competitors who told growers to wait, with the latter proving to be expensive advice.
Fungicides are currently in good supply, helped by the fact that parts of the country are dry, and stock has therefore become available. This year the industry forecasted shorter than average across the country so if the weather forecasters continue to be wrong and rain keeps falling over August, supplies will tighten up quickly. On the flip side if the weather follows the El Nino forecast there will be plenty to go around.
Urea has been an industry nightmare this season. We’ve had many debates over the last month as to who is to blame, and one grower told me the other day the blame lies on weather forecasters. The dry season meant no one took a risk with ordering ahead – the grower, the reseller, or the fertiliser companies. Couple this with urea prices dropping which meant the suppliers were even more risk averse, it’s ended up in an unfortunate position. If you have orders in with us, please note that most boats are being delayed so please work closely with us to get your product out but please be patient and understand everyone is doing their best in a difficult situation. Everyone in our fertiliser team is working extra hours to ensure our customers get all the latest information from suppliers on availability.
We hope August is kind to you – if you’re too dry we hope the rain finds you and if you’re too wet we hope the sun comes out! I’m not sure if that’s going to be possible from here but we can only hope for the best. Please keep in regular touch with your Crop Smart sales rep on pricing and supply as there’s a bit happening at the moment and as always, we will try and position you well into the next six months with all the best market intel we can find.