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IN 2005, agricultural retailers confronted grower fears, procured adequate fungicide supplies and developed plans for rapid application, all for a disease that didn't show up.
But retailers and their customers know that the threat of Asian soybean rust (ASR) will be as real in the coming growing season as it was a year ago.
Three agricultural retailers explain how they prepared for ASR in 2005 and how they will handle the threat next year.
Alvin Minsky, Raley Bros., Monticello, LA
With the first-ever confirmed ASR case in the U.S. occurring just 250 miles to the south in 2004, Louisiana field consultant Alvin Minsky went into the 2005 crop year advising his clients to build two ASR fungicide treatments into their soybean management programs.
But as the year played out, with ASR a no-show, he advised customers to delay the first “automatic” fungicide treatment planned for first bloom. Most customers ended up applying what would have been the second planned fungicide treatment at about the R4 plant growth stage to control stem and leaf pod diseases.
Minsky, who is a consultant for Raley Bros., an agricultural retailer headquartered in Monticello, LA, recommended holding off on the first application based on his own scouting but also relied heavily on extension service scouting and sentinel plots. “As long as we weren't hearing anything from our state and neighboring states, we knew we could hold off,” he says.
Fungicide use in soybeans has been on the uptick in the Raley Bros. trade area the past few years because of greater awareness of soybean diseases and improved soybean prices necessary to pay for treatments. Minsky estimates that last year 10 and 20% of soybean acres were treated with fungicides. This year, the percentage climbed to about 90%.
“Most of my growers think it was a benefit to them, even not considering Asian rust,” he says. “You could tell the beans that didn't get sprayed. They will do it again next year even if we don't have ASR.”
Minsky says the missed early treatment left the company with extra fungicide supplies. Some were used to treat rice, and the rest was returned to the manufacturer.
He doesn't plan any changes in recommendations for 2006. He plans to have enough product on hand for 1 to 1.5 fungicide treatments on soybean acres. “I am going into next year playing like I did this year,” he says. “I will do my own scouting and work closely with extension. Just play it by ear.”
Phil Brewer, Midland-Impact LLP, Danville, IN
As ASR fears began to take hold with customers last fall and winter, Midland-Impact LLP, Danville, IN, unveiled a multimillion-dollar plan to allay customers' concerns and to underscore its commitment to customer service.
It decided to procure fungicides for a majority of its soybean acres knowing that it could be left holding the inventory if ASR didn't strike. It also added four new self-propelled spray rigs to cope with the extra spraying load that would occur if ASR hit.
The total bill? Over $4 million.
“We decided to take a progressive stance with our growers and take the risk of buying fungicides on their behalf — that we would take care of their needs,” says Phil Brewer, northern agronomy division manager for the company, which is expected to grow to 23 locations in Indiana, Ohio and southern Michigan through a recent addition to its partnership.
“The main thing we wanted to tell our customers is not to get overanxious,” he says. “We were trying to discourage utter panic and fear. Once we had the product in place, it really squelched the nervousness.”
Brewer was nervous himself, given the difficulty of lining up fungicide supplies. At first, it seemed as if the company's goal of buying enough fungicide to treat about 60% of customer acres was unlikely to be achieved. Finally, adequate supplies became available.
But with nervous stomachs at rest, the company found that customers weren't biting on a new program to encourage them to apply fungicides on 20 to 30% of their soybean acres to improve overall plant health.
“We were sitting on $3.5 million of inventory that we were told there would be no return on, yet our customers were not stepping up to buy it,” Brewer says.
Eventually, about 15% of soybean acres were treated to control a range of diseases other than ASR that can affect plant health. And in the end, the distribution channel accepted return of most of the unused product, which eased the financial strain of carrying over supplies.
The company is refining its strategy for handling the ASR threat in 2006. Once results are in on the yield impact of fungicide treatments for improved plant health, it will consider rolling out a program to encourage their general use.
“Coping with ASR will be a lot easier if growers are willing to treat some of their acres for general health,” Brewer says. This would reduce the challenge of making timely ASR applications, since some acres already would be treated.
This approach also would create an ongoing demand for fungicides, which Brewer believes will be necessary for manufacturers, distributors and dealers to maintain inventories necessary to handle ASR.
“For 2006, I think there will be less product available early,” he says. “I think manufacturers will produce product for what they estimate to be the true demand.”
That could leave both growers and dealers nervous about the availability of supplies should an ASR outbreak occur — unless they are willing to stick their necks out and buy fungicides that may not be needed, Brewer says.
Dale Ford, River Valley Cooperative, Walcott, IA
When customers began clamoring for scarce supplies of fungicides to treat ASR late last fall and early winter, Dale Ford and his agronomy staff at River Valley Cooperative, Walcott, IA, came up with a plan to defuse the fear gripping their customers. The plan also included a strategy to boost the co-op's spraying efficiency.
Today, the plan sits on the shelf, unused, but ready for 2006. Though the plan is untested, Ford, agronomy manager at the multilocation eastern Iowa co-op, is confident it will allow the co-op to custom-apply ASR fungicides in a timely manner if the need arises.
Under the plan, the co-op agreed to procure fungicides and treat a customer's soybeans for ASR as needed in exchange for the authority to decide whether and when to apply a fungicide and what fungicide to use. The customer provided maps of all soybean fields to be treated to aid in application planning.
The cost to the customer? Nothing, unless an ASR treatment was made.
That no-cost-if-not-used feature attracted a lot of attention from customers who were grateful that the co-op was willing to take the risk of procuring fungicides on their behalf. About 75% of the co-op's regular custom-application customers signed up for the plan.
“The acceptance of it was just phenomenal,” Ford says. “Customers thanked us for being proactive. Everybody else was trying to sell product, but we felt we shouldn't overreact. We put our money on the line. If we had asked our growers to pay for this, there might have been some issues.”
Having acres signed up ahead of time, and knowing exactly where they were, were critical aspects of the plan, which was described in detail to customers at winter meetings.
If ASR had struck, the co-op planned to begin spraying at one side of its service area and gradually work across the region to minimize travel time between fields. “Being able to spray in an orderly fashion was important,” Ford says. “If we didn't have any weather issues, we knew we could get it applied within a week.”
The co-op identified additional operators to handle extended spraying hours, plus two area farmers with self-propelled sprayers who could be enlisted as well.
“Our customers were very confident they would be taken care of,” Ford says. “It was a boost to us by coming out with this.”
Procuring adequate supplies of fungicides was challenging. The co-op placed standing orders with its distributor, which were finally filled in March and April. The fungicides were purchased with the understanding there would be no returns, but the co-op's distributor ended up taking the product back.
The co-op was prepared to foot the cost of holding the inventory, Ford emphasizes. “This is the cost of doing business for a value-added full-service cooperative,” he says. “This threat is for real. My best guess is that it might affect our geography one in four years, but we have to be ready every year.”
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