Why is it such an anxiety-laced struggle to buy a jug of glyphosate this fall? The short answer: I don’t know. No one knows the full interwoven shuffle of influences that are driving up prices for some products and cutting off availability for others. A longer answer involves looking at several of those influences:

During global pandemic lockdowns, consumers spent less money on going out and more buying gadgets for their homes. This runaway trend slowed in July 2021.

To plant wheat this fall or to get everything set up for row crop planting in spring 2022, U.S. grain producers must have seeds, fertilizers, herbicides, seed treatments, machinery parts and all the other crucial little things that need to be shipped from the distant places where they’re manufactured to the rural storage sheds and fields where they’ll be used. At the same time, South American farmers are urgently scouring the global marketplace for planting inputs, and farmers from every other region of the globe need those herbicides too. Unfortunately, just as all this demand is hitting, the shipping capacity of the world’s ocean vessels and shipping containers and trains and trucks is already overfilled by all the other stuff that people have ordered over the past 16 months since the initial shock of the global COVID-19 pandemic.
In numbers released last month, the U.S. Bureau of Economic Analysis showed monthly spending on durable goods (things that last three years or more: furniture, appliances, tools, electronic gadgets, etc.) in July 2021 remained above $2 trillion, although the figure represented a pullback from May’s record-high $2.065 trillion. Durable goods spending accelerated sharply after the COVID-19 shock in March and April 2020, when global pandemic lockdowns prevented consumers from going out and spending money. Instead, consumers directed their money toward gizmos and widgets for their homes, which typically arrive in the U.S. packed in the same shipping containers needed for everything else (including tractor parts). Congestion at the Port of Los Angeles has persistently kept about 60 container ships waiting in line in recent weeks. All those gadgets and all that stuff — even if it’s manufactured domestically and doesn’t need to be shipped thousands of miles across an ocean — still needs to be shipped somehow between manufacturing plants and consumers, competing against intermediate bulk containers (a common method for shipping fertilizer) for truck driver availability, if nothing else.

This one is tricky. It may be that there is legitimately a shortage of qualified workers (for instance, commercial truck drivers who already have their CDLs) compared to the sheer volume of stuff that needs to get unloaded at the ports, handled in warehouses and trucked where it needs to go. Or it may be that there is a shortage of people willing to take those jobs at the wage levels being offered. This seems like a problem that could be solvable, eventually, but it’s anyone’s guess about how or when.

If you’re alarmed by the sudden price increase for natural gas, with Henry Hub prices recently above $5 per metric million British thermal unit (MMBtu) after drifting mostly under $3 since 2014, at least be thankful we’re not in a region at the mercy of Russian natural gas shipments: European natural gas prices skyrocketed past $20 per MMBtu last week. Global arbitrage is limited for natural gas unless it’s liquified, but we should still expect prices to remain elevated as winter approaches. That’s alongside RBOB gasoline futures above $2 per gallon and heating oil futures above $2.15 per gallon. Diesel prices in the Midwest, currently ranging about $3.10 to $3.25, are $1 per gallon higher than they were a year ago. Basically, any sort of fuel is currently priced at a multiyear high, and that only adds to the price tag for any crop input that’s being shipped.

The manufacturing plants where certain crop inputs are made — notably glyphosate and glufosinate — have suffered unfortunate weather disruptions at just the wrong time when producers are relying on new supplies to somehow make it through the supply-chain quagmire. Bayer’s glyphosate plant in Luling, Louisiana — the largest producer in the United States — had to temporarily go offline while Hurricane Ida hit that region late last month. Meanwhile, global production of glyphosate has perhaps never fully recovered since floods in China’s Sichuan province in 2020 damaged production capacity of not only glyphosate but also of the industrial chemical (an iminodiacetic acid called PMIDA) that’s necessary to make it. Clear information isn’t available about how much global glyphosate production capacity is operational right now or how quickly the industry could meet global demands, even if it didn’t face shipping challenges between the manufacturing plants and the crop fields.

Every coffee shop conversation about the scarcity of glyphosate (and every online article, such as this one) increases the level of panic in the market, making it more likely that people will run to their suppliers with a desperate willingness to pay any price for the product. It makes me think of lumber prices, which peaked last May at $1,670 per 1 thousand board feet amid a flurry of breathless headlines, but which have since collapsed to a level as cheap as $448 — nearly what they were before the pandemic. However, this herbicide market seems different than last spring’s lumber market because only a few products with legitimate manufacturing constraints are experiencing the disruption. Other herbicide products remain reasonably priced, so perhaps there is neither industry-wide profiteering nor consumer panic elevating the prices, and perhaps the legitimately constrained products won’t be resupplied so easily or have prices snap back so quickly.
I don’t know if buying spring crop inputs at today’s prices will turn out to be irrational or not; calmer prices may or may not resume next year. There is temptation to wait it out, but it’s a decision that could leave a producer scrambling. I will disclose that I signed a contract this week to lock in my crop inputs for next spring, paying 2.5 times as much for Roundup and 75% more for fertilizer than I did when booking inputs last October. And you know what? I don’t feel particularly bad about it. I consider it an opportunity to manage risk and to put a known quantity on paper for 2022’s production among all the other ultimately unknowable things that can happen when farming.

Elaine Kub is the author of “Mastering the Grain Markets: How Profits Are Really Made” and can be reached at masteringthegrainmarkets@gmail.com or on Twitter @elainekub.

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