Global supply chain trends from as far away as China can have a big impact on how much you pay for the chemicals you use on your farm. A movement in China taking place right now toward stricter environmental protections and factory shutdowns is already having a major effect on chemical supply and prices.
What Goes Into Producing Your Chem?
There’s a lot that goes into the products you use to protect your fields. Many of the minerals and raw materials that are mined to make end products originate offshore. In fact, most of the industry sources their raw materials and technical grade active ingredients from China. We can see this from public information import records1 that list all companies that import technical grade active ingredients.
These materials are shipped to the United States and then converted into a concentration of an active chemical--like glyphosate or dicamba for example--here in the U.S. This is common across industries, from televisions to tennis shoes, and it absolutely is true in agricultural chemicals. What companies import chemicals? Nearly every one that you’ll encounter, from Monsanto to Syngenta to Bayer Crop Sciences and BASF.
Factories in China are Shutting Down
The availability of those technical grade ingredients that make up your chemicals is currently being affected by widespread factory shutdowns in China. Environmental issues have become a major topic in China, and backlash against pollution has led to factories that create everything from chemicals to textiles closing down. China’s Environmental Protection Agency is leading the charge. According to an October 27, 2017 Forbes article, China has shut down tens of thousands of factories in the past few months for environmental reasons.
The supply crunch is hitting a broad range of players in the crop protection industry, according to Agribusiness.
Supply is Uncertain and Prices are Rising
Farmers are likely to see uncertainty in both supply and pricing over the coming months. With supply shutting down and demand remaining the same, prices rise.
According to ChemLinked, the following active ingredients commonly used in chem have been affected:
- Azoxystrobin - found in Quadris®
- Chlorpyrifos - found in Lorsban®
- Glufosinate - found in Liberty®
- Bifenthrin - found in Capture®
- Clethodim -
- Metolachlor - found in Parallel®
- Propiconazole - found in Quilt®
We have seen the prices of chemical products rise, and indicators show that this will continue because there is likely an ongoing decrease of supply on the horizon.
We’ve created this guide to help farmers use chemicals more safely while understanding and minimizing their chemical costs.
By The End of The Guide, You Will Know:
- The difference between branded and generic ag chemicals
- What to consider when choosing between premix vs tank mix
- How to decode ag chemical labels like a pro