The supply chain constraints are continuing to plague agriculture, and as farmers work to make input decisions for the 2022 season, economists expect high input prices to persist through spring. One major reason for the severe supply chain constraints is China, as nearly 75% of the active ingredients and crop protection chemicals comes from China.
Despite President Biden and China’s Xi Jinping holding a closely watched virtual meeting last week, the supply chain issues weren’t discussed. As AgWeb has reported, glyphosate prices are up anywhere from 100% to 300% in areas, and that’s if you can even get it.
Geopolitical Issues at Play
During a recent supply chain discussion hosted by Farm Journal, RaboResearch analyst Sam Taylor said China is the main source of herbicide supply issues for 2022. Taylor, who researches the farm inputs sector in North America, not only looks at fertilizers and agrochemicals, but the broader farm economy as well.
“Between 70% and 75% of active ingredients do come from China,” Taylor told AgriTalk host Chip Flory. “If you drill down into the data, somewhere close to 90% of the intermediates, which go into the production of active ingredients, are actually sourced from China.”
Nutrien Ag Solutions is also watching the situation. Due to China’s zero-tolerance COVID policy from the start, and implementing strict lockdowns to prevent the spread of the virus, the company reports the U.S. knew farm inputs would see tight supplies, just not this severe.
“Given the fact 70% to 75% of the active ingredients that make up our crop protection chemicals come from China, we knew that there had been slowdowns, lockdowns over there. So we were preparing in some ways, but we really didn’t know until March what the full effects were going to be,” says Jeff Tarsi, Nutrien Ag Solutions.