Challenges highlight global supply connections

PEORIA, Ill. — Supplies and transportation were costly major roadblocks for the agriculture input industry and farmers in 2022 and highlight the connection between the global market and farm gate.

Kevin Johnson, Illinois Fertilizer and Chemical Association president, looked back at last year’s challenges and ahead to 2023 during the organization’s annual convention.

“There were quite a few challenges, but there were also some successes in 2022. Fertilizer pricing was a challenge. Everything with Ukraine and the natural gas global market has pushed fertilizer prices up because if it’s nitrogen, it starts with natural gas,” Johnson said.

“That was a challenge. I think we’re in a better spot now. It has tweaked down, but as I always tell people, let me know what’s going to go on with Russia and Ukraine and I’ll give you a better idea of what’s going on with nitrogen.”

There were also supply issues to get active crop input ingredients in early 2022 due to shipping problems in Asia.

“I do feel like we’re definitely in a better spot going into 2023. There might be some Group 15 (herbicide) products that may be a little bit tight, but I think we’re actually in a very good position with the Liberty-type products than we were six months ago,” Johnson said.

“A lot of the chemistry comes out of Asia and when a ship is not running or it’s backed up it creates problems in the fertilizer industry. I don’t think people realized until this year and maybe they still don’t realize that fertilizer is truly a global marketplace.

“I think we’re in a better spot now.”

—  Kevin Johnson, president, Illinois Fertilizer and Chemical Association

“It’s not just what’s going on in the United States. If there’s one hiccup in one country that’s producing a lot of something, it’s going to have ripple effects for a long time down the road.”

The reasons for the herbicide shortage last year included a decline in number of laborers to unload tanker ships at ports, lack of truck transportation from the ports to get the ingredients to U.S. formulation plants or formulated products to the retailers, reduced supplies of some of the inert ingredients of the formulation, shortages of materials to make containers and packaging, and Hurricane Ida that damaged a glyphosate production plant in Luling, Louisiana.

“Transportation has been an issue. You can’t find any truck drivers, there was the threat of a rail strike and then low water levels on the Mississippi River,” Johnson added.

Outlook

Looking ahead to 2023, Johnson noted several issues IFCA will be focusing on, including a new ag retail survey to collect data on the level of nutrient loss reduction efforts on farms. The IFCA-led effort is supported by numerous commodity groups.

“It’s going to be a heavy lift, but I think we can get it off the ground and find good data. Our liaisons will go out in February and March to do the surveying,” he said.

IFCA will continue to monitor state and federal legislation related to the ag input industry.

“We’re going to be very busy at the state capitol with regards to legislation. I think any legislation relating to fertilizer might be light, but we’re probably going to see 10 to 15 pesticide-related bills that will be brought up, either a ban, restricted use or some other kind of limitation. We’re going to have to fight hard on that,” Johnson said.

“We are also dealing with more urban legislators than we have ever had, and I’m just not saying the city of Chicago. The power of legislators from the five collar counties around Chicago has grown even more. So, we’re going to have to deal with that and have good talks with those legislators about how important these products are.”