Farmers told to put 'pressure' on retailers to give input price forecast

Mr Dawes, owner of Rob Dawes Consulting, said such pressure, coupled with good retailer relationships, were of "benefit" to farmers seeking best value.

He was speaking to more than 200 farmers at the Farm Tender 2024 conference in Marnoo last week.

He said agri retailers ordered product today that they would sell in three months' time.

"We really encourage clients to spend a lot of time putting a lot of pressure on retailers to find out what that price is doing," he said.

The consultant, who assisted clients who purchased in excess of $355 million worth of inputs last year, said farmers should have a formal catch up with their retailer each quarter.

He said this formal catch up should be aimed at forecasting input prices for the following quarter, or two quarters.

"Forward forecast with your retailer and then put pressure on that retailer to say is price going up and down," he said.

"They have a very clear vision three months out on what chemical price is doing."

This medium term forecast was possible for all agricultural inputs except fertiliser, according to Mr Dawes.

He said urea was the "trickiest thing to forward forecast".

"We struggle to get transparency as well, particularly urea," he said.

"It can move $100 over a weekend, it can move $100 up or down.

"One of the big impacts is the Indian government tender on behalf of Indian farmers four or six times a year.

"They could put out a million to a million and a half tonne tender for urea and then depending on what gets offered, they might order only half a million tonnes.

"The price can come off then the day after that tender."

However, Mr Dawes suggested there was "some indication" of downward price pressure for urea for June or July.

He said urea is currently $750 to $800 per tonne.

"We think it should come back to that sort of $750, maybe back to the $700," he said.

"We don't put our hand on our heart on urea though."

When it came to fertiliser, Mr Dawes said farmers needed to make their retailer aware of what they plan to order.

"Make sure your retailer knows because then they get the message through to the importers and if the importers get the message that there is going to be demand, they will bring ships in," he said.

"If they don't get that message like they didn't get last year, we just won't see ships sailing into Australia.

"Don't surprise your retailer because they'll surprise you back."

The farm inputs consultant also said farmers should build long-term relationships with their retailers.

"We don't encourage our farmers to switch from retailer A to retailer B, to C, back to A," he said.

"Sticking with a retailer when you have a long-term relationship will help make sure you get your product on time."

He said switching retailers for "10 cents here and five cents there" was not in the "long-term benefit of the farmer".

"We encourage long-term relationships and we also encourage our clients to have more than one retailer but not more than two or three," he said.

"Two is a good number and I think that puts enough pressure on the retailers to do the right job.

"Even if you give 80 per cent of your business to one and 20pc to the other, at least you've got a back up plan if something goes wrong."