5 tips to stay ahead of the supply chain issues
The supply chain issues that hampered the agricultural sector in the early 2020s provided many takeaway lessons that farmers can leverage to protect themselves from potential challenges in future.
Disruptions to national and global supply chains affected growers in numerous ways, including their ability to purchase inputs, new equipment, seed and machinery parts.
Leigh Anderson, a senior agricultural economist with FCC, says disruptions led to farm input rationing and long delays in acquiring some equipment. The lesson? Planning is key, says Anderson.
“If you’re thinking of getting equipment now, get ahead of the game and put that pre-order in,” Anderson says. “You can’t just decide today, I’m going down to the dealer and see if I can get a new piece of equipment. Be proactive and plan out your equipment replacement cycle.”
Be proactive and plan out your equipment replacement cycle.
Putting an order in could mean a year or two before it’s ready as manufacturers continue to play catch-up.
John Schmeiser, chief operating officer and president of the North American Equipment Dealers Association Canada, says gone are the days of impulse buying large equipment to use right away.
”The entire equipment industry has transitioned to a just-in-time model,” Schmeiser says. “From the production end by manufacturers when they receive their raw materials or components, to the equipment delivery immediately before farmers need it in the field.”
This forces farmers to plan their equipment needs 12 to 18 months out, but at the same time, it can help better manage cash flow.
Adjustments have been made to supply chain issues that developed during the pandemic, he says, and the sector is returning to the pre-2020 equipment ordering process.
According to Mitch Rezansoff, executive director of the Canadian Association of Ag Retailers (CAAR), some farmers make spring seeding decisions during harvest.
Consider crop yields, rotations and fertilizer needs. If you harvest a large crop, you may need to apply more fertilizer the following year. If conditions were dry, some residual nutrients might still be available in the soil next season.
Anderson adds that some farmers may best serve their interests by limiting planting on fringe acres and instead focusing on their best fields to obtain the best growing conditions.
Your favourite pesticide or fertilizer brand may be unavailable, but there are other options, maybe even generic products.
“You may not acquire the exact brand you’re looking for, but is it acceptable? If it’s acceptable, you lock it in,” Rezansoff states.
Have a relationship with multiple retailers, so you’re minimizing your risk, Rezansoff says. Develop a close working relationship with them so you understand what they can deliver - and they understand what you need.
Surround yourself with multiple trusted advisors. “It’s people that provide reliable information for your needs. And you should have multiple, not just one sole source,” Rezansoff says.
Article by: Richard Kamchen