Registrants who tuned in to the Green Markets webinar Fertilizer Distribution: Addressing Market Volatility in a Changing Landscape were treated to a candid appraisal of the current fertilizer landscape by three industry representatives on Oct. 20.
Jeff Greseth, director of supply and trading, crop nutrients, for CHS Inc., provided an in-depth look at current pricing and supply variables for the major nutrients, and also offered market predictions for spring 2011. Contrasting 2008 with the current spike in fertilizer prices, Greseth said global commodity market inflation was behind the 2008 surge, while global grain supply and prices are driving it in 2010. “If this continues, corn will be king,” he said.
Greseth asked and provided answers to key questions facing the industry, including where prices are headed, which products face supply uncertainties, who has the pricing power, and when and how much dealers should buy.
On the distribution front, Greseth predicted more consolidation among producers and agronomy groups, more fluid product movement into and out of the U.S., and a large shift in how fertilizer products get to their markets. Demand is difficult to predict, he said, but “volatility will continue and supply interruptions will be common.”
Doug Stone, president of Consolidated Sourcing Solutions (CSS), discussed where storage and partnerships fit in fertilizer distribution channels. Stone said strategic partnerships – such as the one between three regional cooperatives that created CSS earlier this year – help manage costs, provide more margin potential, bring greater security to supply, and support market penetration.
Stone said few retailers know how to understand and measure their price/supply risk exposure, and how to manage downside volatility. Looking ahead, he said to expect continued market volatility, a greater emphasis on customer-focused distribution models, more distribution partnerships, and a push to involve growers in forward commitments. “Distribution does offer value and can provide competitive advantages,” he said.
Mike Brito-Amador, president of the start-up company Agricultural Solutions LLC, rounded out the panel presentations, and gave an update on his company’s terminal plans in Osceola, Ark. At the conclusion, webinar attendees posed questions to the three speakers for 30 minutes via email and instant messaging.
A CD recording of the webinar can be ordered online at http://greenmarkets.pf.com/fallwebinar/; by email at subserve@ioma.com; or by telephone at 1.800.531.0007 or 1.973.718.4700 x 2.