"The Bad News is Time Flies. The Good News is You're the Pilot."
(This quote by Michael Altshuler is a perfect way to summarize two important realities that we all face, one that we know, and the other that we should be aware of. The knowledge that we are in control of where we are headed is an important facet in helping us understand the power that we possess.)
As we begin our planning for the upcoming sales year (which will officially start on October 1), one of the tasks that falls to me is to try and give some perspective on what we see happening in the new year. The nature of agriculture makes trying to predict anything problematic at best. Being in business for 68 years does give us a useful perspective, and operating with a very consistent set of values based on serving our customers makes my job (of speaking about the upcoming agricultural year) a bit easier.
The advantage of working for a company like Growers follows one of my favorite quotes of Mark Twain: "If you tell the truth, you won't have to remember anything." Our organization is rooted in being honest, straightforward, and committed to helping its customers succeed. It is a great place to work and makes falling asleep at night much easier. Okay, commercial is over. Here is our take on the "new year:"
The consensus is that prices across the board will either stay where they are or go up. Inflation may become a big issue as will the supply of almost everything. To make things even more interesting, the possibility of a recession also seems to be a reality. Overseas transport pricing may soften a bit, but it looks like domestic transport may continue to be an even bigger problem. Situations in getting raw materials from non-US sources will continue to be an issue both in terms of supply availability and transport.
Agriculture is not local or national, but global. There are so many factors outside of our control that play a part. Our feeling was and continues to be, control those things that you are able to, be open to learning as much as you can, and realize that we are all working together to create the best world we can.
But having said that, farming is still very much a local issue. Success with crops depends on healthy soil and a good understanding of what really takes place below the surface of the soil. Our experience has taught us that it is not what you put into the soil that determines your success or failure, but what you know and how you apply that knowledge into your operation.
But we are in the business of selling a unique product that has proven its worth to our customers since 1955. Having a superior product is only part of our story. The way we operate our business may be as unique as our product.
The pricing model for GMS is based looking at the actual costs involved in making, delivering, and selling GMS. To those costs we add a reasonable return on our investment and set our prices accordingly. We don't pay a lot of attention to supply and demand as a rationale in setting our prices. Taking that course of action this year could have given us a much higher return on our investment, but we like the idea of being consistent with our business model, especially if that supports our customers. (The price of GMS is up approximately 60% over a year ago. Many other input costs have gone up over 150% over the same time.)
The main costs involved in GMS involve the high quality raw materials that are used in making GMS, and the transportation costs both from our suppliers to us and from us to our customers.
For the raw materials that we use in making GMS, this has been a challenging year both in terms of getting the best pricing and consistent supply. Fortunately, adequate inventory of GMS in storage throughout our sales area has allowed us to supply all our customers' orders in a timely manner. That is the advantage of having a product that will stay consistent in solution almost indefinitely.
Our plan for this year is to have a consistent supply of GMS available. The advantage of a highly efficient product (90% utilized by the crop) that can be applied when and where it is needed was a unique benefit of our product when it was developed. Those same attributes make our product not only unique but an extraordinary value because it represents a strong return on the investment of costs involved in plant nutrition.
As we begin our 68th year, we are grateful for the support of our loyal customers. Using a product and following an approach that is not widely endorsed takes someone with a bit of courage and a willingness to think outside the box. For all of you who joined us on this grand adventure, we thank you and look forward to the next 68 years.
This is an excerpt from the Early Fall Growers Solution (2022) written by Rick Bobel, President of the Board of Directors.
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