Anyone operating using fertilizer needs to be aware of the state of the supply chain. Price and availability issues have worsened in recent years, and it's critical to think ahead so you can minimize the potential impact of fertilized supply problems. You should consider these 5 things as you try to navigate these concerns.
Futures Prices
Keeping tabs on the futures prices index will give you a sense of where your costs are likely heading. Bear in mind that this won't give you a one-for-one comparison to your nearby suppliers' prices because they have to deal with transportation costs and local demand. However, your suppliers' numbers should track with the futures price enough that you can anticipate the trends. Keep an eye on the months of the year when futures contracts are cheapest because this may represent a buying opportunity.
Storage
One major downside to trying to time the price of fertilizer is that the product can be difficult or even dangerous to store. Know your storage capabilities before you buy. Likewise, know how long you can safely store your preferred fertilizers before they become hazards. Take care to keep your storage facilities as clean and well-maintained as possible to reduce associated risks.
Substitution
Another way to navigate fertilizer supply situations is to know what your substitution options might be. Develop a list of products that may serve as substitutes, and try to do the research long before you need to make any choices. This will allow you to make informed decisions when you see a favorable price or can't overcome a lack of availability.
Take the time to research how any substitutes will affect your crops, too. There are scenarios where substituting something cheaper may prove to be penny wise and pound foolish.
Timing
Farming is always going to be an imperfect science, but you should keep records of your preparations for each season. These will allow you to get a better sense of the timing for when you'll require fertilizer. If you can work with a fertilizer supply company to fit deliveries within your schedule, do so. Try to target a delivery window that allows you to safely store the fertilizer long enough that you can plant crops as late as possible in years when the weather isn't on your side.
Contracts
Use contracts to lock in fertilizer prices and availability. Ask an attorney to read the terms of all contracts that are critical to your operation's fertilizer supply. Seek the greatest security of delivery possible in all your supply contracts.