We have storage facilities for liquid nitrogen, starter fertilizers and bulk herbicides. We typically restock now when prices are lower. This year they’re still high. Should we hold off buying, or is this the best opportunity for 2022?

The Profit Planners panel includes David Erickson, farmer, Altona, Ill.: Mark Evans, Purdue University Extension Educator, Putnam County, Ind.: Jim Luzar, landowner and retired Purdue Extension educator, Greencastle, Ind.; and Steve Myers, farm manager with Busey Ag Resources, LeRoy, Ill.

Erickson: Discuss pricing opportunities with suppliers who can meet your needs. Do not limit yourself to your normal supplier, but get prices from several. Make sure you understand and consider payment terms before making a final decision. If you are unsure about when to purchase, you could consider spreading your risk by purchasing some of your input needs now, but not buying them all.

Evans: Everyone will know the answer next May! On one hand, should inputs become tight or unavailable, you will be glad to have materials on-site. Yet if you buy now, the investment could look bad if material prices drop 20%. There seems to be three options: First is to go ahead with current price. It helps you lock in your cost and is peace of mind that you have your material. Another option, if loss of quantity pricing doesn’t cost too much, is to consider buying half now and the other half later to hedge input costs. Finally, just wait and see. But stay close to the news, and aggressively research input availability and pricing frequently. You can store and buy at any time.

Luzar: Fertilizer price is determined by derived demand. Usage increases with higher crop prices and crop acres. If 2022 crop price outlook continues to look favorable, demand for fertilizer should be robust. The demand side of the equation suggests locking in product now and reviewing your soil fertility program to be as efficient as you can.

Supply factors for fertilizer are tougher. Geopolitical tensions could impact import capabilities or curtail supply. Capacity for product expansion is limited in the short run, due to the nature of production. Natural gas price will be impacted by winter weather. The potential for COVID-19 to undermine importation and delivery of product is uncertain. It would not take many disruptions to push fertilizer prices to record 2009 levels.

Locking in product now allows you to determine budgets and adjust cropping plans. This also allows you to evaluate your 2022 marketing plan with actual costs. Locking in herbicide products ensures you get the products you need for 2022. My main concern is managing in an uncertain input environment and yet avoiding major disruptions to your cropping program.

Myers: There are two reasons to strongly consider locking in inputs sooner rather than later: price and availability. From a pricing standpoint, it does make sense to take the known pricing today compared to the unknown of tomorrow in this volatile world. As always, this is a “lock it down and live with it” approach. For the second part, availability, consider that logistics and true availability of products may be a bottleneck. Get in front of it for how it fits.