Fertilizer Contracting Could Help, But Watch the Fine Print
Producers will have trouble getting refund for unused product.
Bryce Knorr
Published: Oct 29, 2009
Nutrient prices have come back to what passes for normal these days. But the fallout from last year's fertilizer fiasco continues to linger for farmers forced to absorb record high costs.
"They're still very, very upset over what happened last year," says Phil Cochran, a crop consultant from Paris, Ill.
Farmers want more consistent prices and supplies, less volatility, and the ability to forward contract nutrients in advance when prices are favorable, Cochran told an industry outlook meeting Wednesday.
"If you can figure out how to forward contract these products I guarantee you will hit a home run with them" he told an audience of more than 200 representatives from across the industry.
Kevin Mainord, an ag retailer in East Prairie, Mo., said he was surprised "to see so many people in the fertilizer industry who still have a shirt to wear. But it's been no picnic for our producer/customers either."
And the pain may not be over yet. Some growers contracted for fertilizer at last year's high prices, but wound up not using all the product, says Mainord. In years past dealers would give them a refund, but they'll have trouble taking back high-priced nutrients that are worth so much less today. Farmers who haven't read their contracts may be in for a nasty surprise, though it's unclear how the situation will be resolved. "The rubber is going to have to meet the road somewhere," he said.
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