A new report spotlights the lack of transparency in the agricultural chemical marketplace, which was exacerbated by recent disruptions from manufacturing shutdowns, logistics constraints and global trade disruptions.
According to the Chemical Transparency Report prepared by Farmers Business Network, the industry observed a 15% price variance “between the average list price for a product and the price farmers actually paid for it.” Agriculture chemical markets reached peak levels in the fourth quarter of 2021.
While farmers have historically lacked transparency in the agriculture chemical marketplace, the past 18 months have been a period of “extreme volatility,” according to Kevin McNew, vice president of research and chief economist at Farmers Business Network.
An array of factors led to a perfect storm for price volatility, he said, beginning with fertilizer plant shutdowns after Hurricane Ida in August 2021, China’s reduction in fossil fuel energy utilized for manufacturing and congestion at U.S. west coast ports.
Dicamba diglycolamine salt observed the largest single chemical price discrepancy at 238%. Farmers paying the most expensive prices were subject to nearly four times higher prices than farmers on the lower side of the range.
“It is a cry for how bad situations can get,” McNew told Agri-Pulse.
“Farmers are sandwiched between large companies that sell them inputs and large companies that buy their livestock products, or their grains and oil seeds,” he added. “That power paradigm works to farmers' disadvantage.”
Don’t miss a beat! It’s easy to sign up for a FREE month of Agri-Pulse news! For the latest on what’s happening in Washington, D.C. and around the country in agriculture, just click here.
McNew said he expects chemical and fertilizer prices to remain elevated “in this kind of new paradigm of higher energy costs and challenges in global trade that are hampering the broader market.”
The FBN Chemical Price Transparency Report is formulated through crowdsourced FBN member-submitted invoices and price quotes between October 2021 and February 2023. It tracks 3,000 unique pricing data points across 37 states and more than 800 insecticides, fungicides and herbicides for more than 50 ag chemicals. The information provided does not include rebates.
For more news, go to www.Agri-Pulse.com.