Headwinds of Opportunity
They say that “necessity is the mother of invention.” Our current environment in the agricultural sector makes a compelling case for the need for innovation, adaptation, and invention. The pressure is from all sides; rising diesel fuel, labor shortages, increased costs for steel and pvc, and a knotted supply chain. While we have hopefully positioned ourselves well for the 2022 season, the concerns for 2023 are rapidly increasing. How do we replace foreign fertilizer imports? How far do grain markets climb?
One certainty is that we cannot afford to spend the money on the inputs to grow a crop without irrigation. With record production costs and incredible inflation, we must take all of the variables we can out of the equation. Record prices will bring strong returns to successful growers. Failed crops will create major losses.
As we battle these headwinds, we do find opportunities to fortify our businesses. We run leaner, we adapt telemetry and remote technologies to minimize fuel, and we prioritize our expenses. If our projections don’t balance with the expenses, we must adjust. Michigan Valley has had to adjust service rates and equipment charges to combat the increased cost of diesel fuel. Pricing changes on materials occur weekly if not daily. It is a double-edged sword every time we are required to increase prices. We know everyone will realize a magnification of our increased costs at the grocery store. This must be balanced with the reality that food production will suffer further without our crews building, repairing, and servicing the fifteen thousand pivots in our area.
With a clear understanding that our pricing effects the bottom line at the grocery store, we will try to walk the fine line between passing along costs and ensuring we are available to meet your needs in producing the crop.
Good luck this spring and thank you for your business!
John McGee
