By Brian Hefty
If you buy a crop input product and the price drops after you buy, are you price protected?
Here’s an example. In mid-February, most mesotrione (the active ingredient in Callisto) manufacturers dropped their prices. Callisto went down over 50%. Generics went down. I’m still waiting on the details with Laudis and Impact, but they will likely be down, too. If you already bought your product this winter, are you getting price protected?
When the farm economy was booming a few years ago, prices were going up, not down. Depending on which products you are buying, you may have seen your crop protection products drop 10% or more from a year ago. Fertilizer is down, too. That’s all great news at the start of the prepay season, but what happens when manufacturers lower their prices mid-stream?
First of all, understand that most crop protection retailers are price protected, meaning they “can” pass on the savings to you. Odds are high that brokers and online retailers aren’t getting price protected, but all the legitimate dealers usually are.
When it comes to fertilizer, very few dry or liquid fertilizer dealers have price protection, so your odds of getting anything there are slim.
I bring this up today for 2 reasons. First, you need to know that some products have come down in the last few months, so check with your retailer. Second, we expect more price drops in the future. Popular products such as Headline, Axial, and others are coming off-patent, so when will another company come with a generic or a look-alike? What will happen if demand for crop protection products falls? Could a stronger U.S. dollar mean that imported pesticides cost less? We don’t know what will happen with any of this, but we do know there is a lot of downside price pressure right now.
What I’m saying here is talk to your retailer BEFORE you buy. After you’ve already prepaid or picked up the product, it’s a lot tougher to negotiate. Price reductions are great, but only if YOU get the new, low price.