Unlike the toilet paper hoarders that emerged during COVID-19 lockdowns, Australian croppers have had valid reasons to swap their buying patterns from "just in time" to "just in case" when it comes to farm inputs, such as fertiliser and agri-chemicals.
This is to ensure product availability when it is needed most, and to mitigate against the risks of the exponential growth in prices that was experienced for a range of farm inputs in 2021.
Buyers of fertiliser and agri-chemicals, in particular, have felt the effects.
Year-to-date urea imports to the end of April were up by 59 per cent from the previous year.
Agri-chemical company Nufarm has reported early demand for products has likely quite heavily skewed earnings towards the first half of its reporting year.
Inflated ocean freight costs are adding as much as 10pc to the price of a landed tonne of fertiliser, and procurement times are also blowing out.
While necessary during 2021, this early-buying strategy can come at a cost.
In some cases, farmers and companies have required extra infrastructure to store inventory.
Cashflow may also be impacted if growers need to pay for inputs earlier than usual.
And the longer inputs are stored, especially fertilisers, the higher the chance of quality being impacted by weather.
As we hopefully approach the end of COVID-19-related disruptions in supply chains - and I ironically write this sentence in the middle of a hard lockdown - will farmers need to maintain early input buying for 2022?
Let's come at this from two angles - first price, and then surety of supply.
Rabobank considers it unlikely there will be major price relief for fertilisers until at least the end of quarter one in 2022.
It is anticipated strong commodity pricing will continue to support demand for fertilisers and, therefore, global prices.
Chicago Board of Trade (CBOT) wheat, corn and soybean prices are likely to come off marginally by 3.5pc, 16pc and 12pc, respectively.
But these levels are still a long way ahead of where the market was in 2019, and most of 2020.
From a farmer's perspective, the impact of high phosphate prices is not confined to fertiliser.
Phosphate is also a raw material in glyphosate.
Prices of glyphosate from China, which is the source of 65 per cent of global supply and a big chunk of Australian imports, have increased by 75pc this year.
Similarly to fertilisers, we expect glyphosate prices to ease marginally during the second half of 2021.
This is due to higher plant use in coming months, and a slight easing in the price of phosphate.
Unfortunately, we don't think dry bulk and container freight dynamics will improve before the year's end.
This means higher prices and more downside risk.
Growth of new dry bulk shipping capacity is at a record low, and demand for commodities is driving competition for shipping space.
According to maritime transport company, Pacific Basin, the quantity of grain shipped in the first quarter of 2021 increased by 16.8pc year-on-year.
Demand for containers is also at a record high, and shipping container turnover is slow.
Heavy congestion at ports is leading to higher freight costs.
We see further downside risks mounting.
The Winter Olympics is scheduled to be held in Beijing in February, and this may mean tighter restrictions on Chinese fertiliser and agri-chemical production to address smog issues.
In our view, this all adds weight to farmers again seeking a "just in case" strategy for input purchases for the 2022 season.
They are starting conversations with their suppliers sooner rather than later.
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