Manage Fertilizer Prices and Supply
Farmers today typically spend about one third of their total input costs on fertilizer. Now, a fertilizer purchasing program called ADM Farm Direct Fertilizer gives producers more control over crop nutrition costs, and can reduce them significantly in many market conditions.
The advantage comes from buying in bulk earlier in the supply chain, and having maximum price transparency for both short- and long-term purchasing. Traditionally, it has been difficult to see prices when you want them.
ADM Farm Direct Fertilizer procures fertilizers directly from the source and brings it directly to your farm, saving you both time and money. The program also lets growers track fertilizer prices as they fluctuate. Producers can lock in orders when prices are more favorable—and even submit bids on where they prefer to buy.
“With our transparency and suggestions, we can help growers capture what we think are some of the lows in the market,” says Zach Jans, Territory Origination and Sales Manager with ADM in Southern Minnesota, Northeast Iowa, and Wisconsin. “If you look at historic charts over the last 15 or 20 years, the better time to buy fertilizer is usually in summer months when the crop is growing. With pricing six to 12 months in advance on some of our products, you can lock in fall inputs for October and November—or even for spring inputs for the following crop year.”
ADM Farm Direct Fertilizer is designed to lower input costs, and remove some price risk from an upcoming crop.
Although every farm and year is different, ADM Farm Direct Fertilizer is designed to lower input costs, and remove some price risk from an upcoming crop.
“By buying early, growers can try to lock in margin and take risk off the table for those bushels. That’s how we see the big value and the most savings,” says Noah Binkley, ADM’s Territory Origination and Sales Manager for Kentucky and the Southern third of Illinois. “The savings vary year to year, but we’re often able to save a farmer a substantial amount—typically about $30 to $40 a ton.”
ADM Farm Direct Fertilizer publishes fertilizer prices through a weekly e-newsletter and monthly conference calls. Growers can also download a mobile app called ADM Offer Management, and see local fertilizer prices posted at ADM distribution points. They can also use the app to bid on fertilizer at a price that makes sense for their operation.
Use the ADM Offer Management app to bid on fertilizer at a price that makes sense to your operation.
“If a farmer has some idea where he needs phosphorus or potassium costs to be, he can put in firm bids that might be below the current market,” Binkley explains. “We’ll keep an eye on those bids every day, and if it does drop to that level and he’d like to book some, we can secure some tonnage for him.”
Buying fertilizer has traditionally been a “hand to mouth” transaction, says Jans, so not many farms have storage for large volumes. To address this, ADM Farm Direct Fertilizer has forged a relationship with Meridian Manufacturing, a grain and fertilizer bin manufacturer. ADM customers can either purchase on-farm bins outright or lease for five years at 0% interest.* “Producers can store 100 to 150 tons of dry product for between $16,000 and $18,000,” says Jans.
“This offers producers the flexibility of timing that application—not having to wait for logistics to show up,” says Jans. “They have the product on hand when they want to go out and spread. Again, it just puts more control back into the producer’s hands.”
Fertilizer is a global commodity in demand by India and South America, among other markets. Because world trade drives price fluctuations throughout the year, Binkley recommends a farmer pay attention to nutrient prices all year, just as they do grain markets.
“Many growers are just trying to break even right now,” says Binkley. “If we can help them save as much as $30 to $40 a ton on inputs on an annual basis, you’re talking tens of thousands of dollars a year. It really goes a long way towards their bottom line.”
*Offer subject to credit approval. ADM products, services and promotional offers vary by location.
ADM is providing this communication for informational purposes, and it is not a solicitation or offer to purchase or sell commodities. The recommendations in this communication do not take into account any particular individual’s or company’s objectives or needs, which should be considered before engaging in any commodity transactions based on these recommendations. The sources for the information and recommendations in this communication are believed to be reliable, but ADM does not warrant or guarantee the accuracy of the information or recommendations. ADM or its affiliates may hold or take positions for their own accounts that are different from the positions recommended in this communication. The information and recommendations in this communication are subject to change without notice.