Ag-chem prices set to price, warns leading buying group
Farmers should budget for inflationary rises in the cost of crop protection products during 2010, according to AtlasFram Group, the UK’s largest farmer- owned farm inputs purchasing and crop marketing business.
"Manufacturers of crop protection products are now releasing recommended prices for the season ahead," explains John Humphreys, Arable Products Manager for the AtlasFram Group. "Our view is that generally these will show an inflationary increase compared with 2009 levels but, as always, the devil is in the detail.
Very few active ingredients are now produced in the UK, which means that prices of finished products are at the behest of currency rates and global market conditions.
"Because the Pound has not strengthened in value against the Euro to the level which some might have hoped for, prices of product manufactured in Europe are coming under pressure and can be expected to increase by at least the rate of inflation. Compounding the effects of exchange rates fluctuations are a range of other global factors. The main one is China’s economy, which is expanding at record levels of 7% to 10% annually, creating greater demand from within the country and pushing up the prices of some active ingredients produced in the Far East.
"One of key issues for farmers this year will be timing their purchases of crop protection products to obtain the best value, but the difficulty for any individual business is deciding at what point to commit. One of the many benefits of being a Member of AtlasFram is that we have a specialist purchasing team who are in constant contact with the markets and can advise Members when to buy, an aspect of our offer which we anticipate will be very important this year. Some products for example have already been negotiated at a lower price than 2009 and an early commitment will be important."
"In terms of how prices of key crop protection products will be affected during 2010, AtlasFram Group’s view is that glyphosate has probably just about reached a low and consequently we expect to see an increase during 2010. There is upward pressure on cereal fungicides, but competition and full availability compared with 2009 should help minimise any price rises. However, some mildewicides are not in plentiful supply, which means that specific products may increase in price by more than others. Label differences between some products will also have a bearing - very few 3C chlormequat products, for example, have the later cut-off date with respect to application.
"The bottom line is that increased rape and wheat plantings this season will mean that demand for crop protection products will generally be higher than in 2009. It is therefore essential that farmers and their agronomists plan likely requirements and commit to at least a proportion of products as early as possible."