“No one has everything they need right now,” says Tom Lyons, vice president of supply chain at Nufarm. “This past year underscores the importance of flexibility and contingency planning. We’ve been on plan A, plan B, and plan C.”
Suppliers and retailers have shared that multiple crop protection products are in short supplies this year.
“The reality is this is a perfect storm,” Lyons says. “The planting conditions are favorable. And product inventories are relatively low. But there are delivery challenges on top of that—and it’s extremely tight.”
Gregg Doud, Aimpoint Research Vice President of Global Situational Awareness & Chief Economist agrees how the factors have lined up as a ‘perfect storm.’
“Soybean acres are up. Commodity prices are up and were already expected to be on a roller coaster through the summer. Now we add in a short supply and rising prices of inputs. Hang on, it’s going to be a wild ride as our supply chain adjusts,” Doud said in an Aimpoint release.
In August 2020, Aimpoint Research saw signals of a tightening crop protection supply chain and advised its members to give extra attention to the space.
Lyons shares that now the growing season has started the “last mile” of logistics is particularly challenging to get product that arrived in the U.S. positioned exactly where it needs to be.
“With the market being as tight as it is, we want to give customers the best information on timeliness,” Lyons says. “It’s a daily review—making sure we’re getting what we anticipated yesterday. We have materials coming in; we have the capability to formulate and execute. We see being able to drive hard for our customers.”
Although large volume AIs such as glyphosate, 2,4-D, and glufosinate are more limited with transport options, Lyons shares Nufarm has used air freight to circumvent the overseas shipping backlogs when possible and necessary for the small volume products.
Lyons notes in the past nine months the company shifted some of its global production as it saw limits in product manufacturing and shipment capabilities. For example, some supplies were shifted from China to Europe and Australia. And Lyons says the company expects to continue to need to be proactive to meet demands for this year and next.
“We have invested in our supply chain in the last three years to offer customers more capacity---more formulation capability. So our priority is to make sure we’ve servicing customer needs for this spring. But we’re already looking ahead to make sure we’re well prepared for fall and winter next year,” Lyons says.
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