The COVID-19 pandemic has exposed some vulnerabilities in the crop protection market. We reported on concerns about supplies of active ingredients from China in early March.
Today, crop protection leaders, such as Brian Cardin at UPL, are reporting varying degrees of impact to the global supply chain in general.
“We’re fully stocked and are strong being back integrated—even through intermediaries,” he says. “For us, it’s business as usual—we don’t have any disruption in supply. We’re fortunate in that regard, and long-term that’s a competitive advantage we’ll have.”
The company manufactures most of its material in India and Europe, which to date he reports has had little impact due to COVID-19.
However, there are two longer-term effects Cardin is watching.
“I’m a bit more concerned about the logistics in the U.S.,” he says. “Right now, it’s tough to move product west as the back-haul opportunities for trucks are limited.”
He also shares that what we are experiencing today could have implications later this season and next spring.
“If I was on the retail side, I wouldn’t wait regarding supply, particularly for key products. I believe the logistics of those could be impacted later in the season—but at this point, I don’t know to what degree,” he says.
Cardin has watched the trend increase for the industry to keep supplies tighter, but depending on factors out of our control, such as the weather and logistical snags, farmers could be left with fewer choices in the future.
“The biggest thing that could impact all of us is the industry’s desire to draw down inventories. If everyone plants in a week or two weeks, then we’ve just got to be aware of the impact, and be ready to be proactive,” he says.
What’s the lesson going forward?
Cardin says retailers should always be in communication with their suppliers. Additionally, he is encouraging retailers to look into the future.
“We are at a crossroads on the chemical side of the business,” he says. “There have been so many companies that have entered the market who are dependent on China for trade. And I say it’s a good time to spread risk. Look at who can be a sustainable, viable partner for the long-term.”