SASKATOON — Farmers should seriously consider locking up their glyphosate and glufosinate needs at today’s rock bottom prices, say suppliers of the products.
“I absolutely think growers should be pouncing,” said Joel Merkosky, president of Johnston’s Grain.
“If I was a producer and I was sitting on a solid cash position, I’d be looking at booking one- or two-year’s supply of these products at these prices.”
Johnston’s was selling glyphosate and glufosinate for $5.79 per litre delivered to the farm as of Jan. 18.
“It’s the lowest that we’ve ever seen on either product,” he said.
Canola farmers spend about the same amount on herbicides as they do on nitrogen fertilizer, according to Saskatchewan Agriculture’s 2024 Crop Planning Guide.
Breen Neeser, Canadian country manager for Farmers Business Network (FBN), said growers have been reluctant to pull the trigger on chemical purchases this year.
“Even though (prices) are historically low, there hasn’t been a stampede to buy,” he said.
He spoke to growers at Saskatoon’s Crop Production Show and Brandon’s Manitoba Ag Days who told him cash is tighter this year than it has been in a while.
“There’s a fairly strong indifference to pay up and load up the shed full of those products,” said Neeser.
However, he worries that growers who are pushing back their usual January-February purchases to April-May could be in for a surprise.
Suppliers are not willing to take on a lot of excess inventory in today’s high interest rate environment.
“I can tell you that our company is not going to take risk on ‘maybe’ purchases,” he said.
That means that the chemicals might not be there when growers decide it is time to buy.
“We’re sort of in a game of chicken,” said Neeser.
“Growers are saying, ‘I won’t spend money, I believe it will be there when I need it.’ And companies are saying, ‘no damn way.’”
His advice to farmers is to lock up 70 to 80 percent of their needs and gamble on the remainder.
Growers shouldn’t drag their feet past mid-February because the supply chain for agricultural chemicals is long, and anything ordered past then might not make it to Canada in time for spring fieldwork.
Merkosky said today’s glyphosate and glufosinate prices are much less than half of the pandemic peak of $13.50 per litre.
Prices soared due to plant closures in China and sky-high ocean freight rates of $15,000 per container, which was 10-times the pre-pandemic level.
Today’s shipping rates are $2,000 per container by comparison, and that is up from a few weeks ago due to tensions in the Red Sea and restricted traffic on the Suez Canal.
Merkosky said manufacturing plants in China are eager to produce big volumes to make up for the downtime during the pandemic.
“They probably overproduced what we needed to supply the North American market,” he said.
“That drove prices down sharply.”
However, he warned all it will take is another health scare or more geopolitical turmoil to get prices heading back up again.
Merkosky said the market appears to be well supplied with product today, but he too worries about what might happen if growers wait until April or May to buy.
Chinese New Year starts Feb. 10 and lasts 16 days. Production will be curtailed during that time.
That means it will be “a race against the clock” to get product to North America in time for those farmers holding off on their purchase decisions, he said.
Neeser said prices are either flat or down for all the major chemicals that FBN sells, but the declines are most pronounced for glyphosate and glufosinate, two staple crop inputs for most farmers.
The company was selling glyphosate for $5.71 per litre and glufosinate for $5.81 per litre as of Jan. 19.
He doesn’t think there is much room for prices to drift lower.
