What Inputs Do You Need to Buy Now? What Can Wait?

Anhydrous ammonia price trends. ( Davis Michaelsen, Pro Farmer Inputs Monitor )
While some input prices stay steady, others are market driven. To capitalize on early order discounts and seasonal prices, plan your purchases now. 

First, determine your fall fertilizer applications, says Davis Michaelsen, Pro Farmer Inputs Monitor editor. “No. 2, what prices for spring can I take advantage of now?”

Booking anhydrous ammonia now is a smart strategy, he adds. Urea, however, is overpriced per historical averages.

A nutrient you probably don’t want to wait long to lock in is phosphate, which has been overpriced in recent years.

“I’m recommending buying some phosphate this fall, not because it’s a great discount but because it’s priced better than it has been,” Michaelsen says.

When to Wait

Certain inputs such as seed and crop protection products dangle early order and prepay discounts as the carrot to encourage fall purchases, but is it a wise decision?

“If we did get a resurgence of COVID-19, another lockdown, not taking the prepay discount and keeping a little bit of flexibility could be a long-term advantage,” says Sam Taylor, Rabobank farm inputs analyst. “So, I would look to punt as many decisions as I could, cognizant of the fact you are giving up a little bit of that prepay benefit.”

Crop protection products, however, have the potential for greater risk for reduced farmer access.

“There is a heightened risk of shortages given the exposure we have to China for active ingredients,” Taylor says. “But remember, we do have domestic production of certain key chemicals, so there is a risk mitigant in this space.”

So far, seed prices seem to be flat, according to David Widmar, economist at Agricultural Economic Insights. “The most likely scenario with seed is flat prices. There could be some products with lower prices, but don’t expect this for new or popular varieties and hybrids.”

When it comes to on-farm diesel, follow seasonal trends. “The week ahead of Christmas and the week right after Christmas are historically a great time to book diesel,” Michaelsen says. 

Read more about phosphorus market influences here:

Petition Accuses Phosphate Producers of Receiving Unfair Subsidies