By Matt Reese and Joel Penhorwood
While some of the challenges in the big-picture supply chain have been corrected since 2020, they have certainly not disappeared. As farmers look to the 2023 growing season and beyond, planning for the necessary inputs, supplies and equipment should begin sooner, rather than later.
“Certainly, it has made growers look further and further out for everything. You’d better be planning at least a year out and it better be more the 2- to 3-year time horizon if you’re evaluating all the contingencies that you might have to deal with,” said Barry Ward, Leader for Production Business Management for Ohio State University Extension. “You are going to need to price and pay for some of this product early so that you have some guarantee, or take delivery earlier. We’re seeing some growers investing in a little bit more storage space for seed and chemical but also fertilizer storage and making some strategic choices. I think there will need to be a lot more management and it’s a lot longer time horizon than what they’re used to dealing with.”
In addition to more time and planning required, costs remain high for some farm inputs.
“They’re higher cost compared to where we were a couple years ago when we look back at 2020 when we were seeing crop prices that were fairly moderate. Then we had all those things happen in the summer of 2020 with the derecho, some of the droughts and that kind of started the ball rolling. Then, of course, COVID really caused some issues with labor and manufacturing globally which led to some of those supply constraints that we’re still dealing with now,” Ward said. “We had issues globally with some fertilizer plants that were affected by labor shortages and shortages of basic inputs that they needed to manufacture fertilizer. It went through the chemical sector too. We saw supply constraints, but some of that’s eased a little bit so we’ve got a little bit better idea on some of those things. Even some of those products that we had high prices for last year on the chemical side, we’re going to see prices ease a little bit on some of those. It’s a mixed bag. The big thing that we continue to hear about is with the machinery and equipment side and having to deal with the parts shortages. Growers are really seeing higher prices there.”
The significant supply shortages of new agricultural equipment and parts does not appear to be changing any time soon. Matt Apple, vice president of Apple Farm Service, has watched as massive changes unfolded for the farm equipment industry in the last couple of years.
“The supply chain in the near future doesn’t look good —that’s the quick answer. That’s just kind of where we’re at right now,” Apple said. “With equipment you need to be planning at least the year ahead if not further. When the manufacturer says, ‘Hey it’s going to be here in November,’ pray it comes in November. We’re looking at build slots into 2023 — and build slots late into 2023 with some equipment. It seems like the manufacturers are trying to push us towards a pre-sale market. I think the days of dealers having a bunch of equipment on their lots are pretty much over. I believe in the short term — probably the next 5 years — this is going to continue. I’m hoping it resolves itself before that, but that’s kind of where we’re at. It doesn’t look pretty. We do a lot of crisis management and some psychologist work — it’s not much fun at times.”
The issue is the broad, difficult-to-address combination of factors affecting the supply chain. Apple said one key moving forward is developing solid relationships with suppliers for the inputs needed for farms. In a time where some customer loyalty to service/input/equipment suppliers may have been diminishing, those relationships may be the difference between securing the inputs necessary for farm production or not.
“There’s a hiccup everywhere. It’s darn near impossible to find good help and then we get situations where we’re needing service trucks and can’t get them. We’re now starting to see a lot of the parts shortages too,” Apple said. “We’re first on the list, but everybody is waiting on a list.”
Zach Dennis is the parts manager for Bane-Welker Equipment, LLC in Plain City. He said the wait time for a part really depends on the specific part.
“It depends on what you are looking for. Some parts are easier to get than others. Some are more challenging. In years past, we have not had as many issues getting parts, but going forward I would recommend looking at your machine sooner rather than later,” Dennis said. “We have seen lead times of 3 weeks for some items and I have an engine on order that won’t be here until next year. It depends on what it is. We have some tracks we ordered in stock now. They were back ordered for 24 months. Once those are gone the lead time is 24 months.”
The hardest-to-find parts continue to change.
“I would especially look at belts right now. That seems to be the main issue this year. Whether it is chopper drive belts, rotor belts or whatever. Feeder chain availability on combines is starting to improve a little bit. Other than that, bearings are an issue as well,” Dennis said. “If you are looking at doing anything with the planter in the spring, as soon as you get the combine back in the shop after harvest, I would pull out the planter and start looking at it — especially on the electronic side. Electronics are going to be hard to get in the spring. Ag Leader, Precision Plant items are going to be hard to get. They are already allocating stuff.”
And, when new parts are acquired on the farm, Dennis recommends holding on to the old parts.
“More guys are saving some of their old parts as well. We put a new chopper belt on our combine last year and I saved the old one. I’m glad I did because we busted the new one and I would have been up the creek without a paddle because I couldn’t get my hands on a new one,” Dennis said. “We are still seeing supply chain issues. This won’t get better for a while.”