FEATURE | i n d u s t r y
No Rest for the Weary Inflation and Supply Challenges Are Tough, But Those in the Florida Ag Industry Are Tougher by PAMELA PALONGUE
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WITH THE CONSUMER PRICE INDEX measuring inflation at 5.4% in July, Bloomberg is predicting this rate will continue to hover above the 5% mark through the end of the third quarter in 2021. Supply chain interruptions and slowed consumer spending are contributing not only to slowed growth in the economy but also a continuing inflationary trend as producers struggle with a myriad of challenges. The bright spot in all of this dismal forecasting may not be so much in the numbers and the data sheets, but more in the historic spirit of farmers’ fierce determination to succeed, no matter the obstacle. Mike Roberts, vice president of Griffin Fertilizer in Frostproof, is seeing restrictions on essential ingredients for production that he has not witnessed in 10 years with the company. Certain products, such as sulfate of potash magnesia, are offered only on allocation. “You’re offered so many tons, and if you need any more, you’re not able to get it,” explains Roberts. Much of the potash is used in the Midwest to produce corn and beans, which are not only widely used in the U.S. but are bought in large supply by China. This raises concerns that with agriculture being such a time-sensitive industry, shortages of fertilizer product blends might leave growers 14 | CFAN
with the inability to produce a healthy, robust crop. However, Roberts explains that despite the frustrating allocations, he does not feel that they are restrictive enough to cause a shortage in the ag industry and subsequently a food shortage for the consumer. “Things aren’t that bad. In the spring, suppliers would run out of products, but only for a day.” Oftentimes it wasn’t just the availability of the product itself that caused the delays. It was frequently a logistical problem in getting the ingredients to the company by truck or by rail. Roberts explains that Florida is a net user of products with more goods coming in than being transported out of the state. The pandemic has caused labor shortages in the trucking industry, and government benefits have been a hotly debated factor in workforce shortages. He also cites an ongoing problem with the increased cost of insurance for truckers coming into southeast Florida, which is 30% higher due to a
higher number of lawsuits. Some economists maintain that inflation is good for farmers with increased market prices for their produce on the back end. However, that takes into account only the end price and not the increases in production for commodities. “The cost of input is outpacing the net returns,” says Roberts, citing the increases in the cost of transportation, packaging and supplies. “Higher input costs are negatively affecting farmers. Ammonium nitrate has gone up year over year, with it costing $130 more per ton. Potash has tripled from a year ago.” He adds that competition from Mexican-produced citrus crops is throwing the market off balance, further increasing the sting of inflation. “It will always be cheaper for crops to be produced in Mexico.” Joe Garrison, a citrus grower from Dundee, echoes this sentiment. He believes government intervention may be necessary to level the playing field for U.S. citrus growers. “The Federal government has got to step in and make it fair for domestic growers. We have unfair competition from Mexico.” Garrison, who grows a combination of oranges and lemons, explains that the U.S. quality of production is better and held to a higher standFloridaAgNews.com
