Source: Radio New Zealand
A fixed-wing aircraft is used to drop fertiliser on a field. New Zealand Agricultural Aviation Association
Rural retailers are reporting the supply chain crunch due to impacts of war in the Middle East is flowing down to key agricultural goods.
Farming customers at major rural retailers Farmlands and PGG Wrightson are being warned that the firms were dealing with price increases being passed down to them by suppliers and manufacturers.
Farmer-owned co-operative Farmlands said prices were escalating for imported products like imported palm kernel expeller (PKE), fertiliser and animal feeds, as well as for plastic products and resins.
General manager of strategy Scott Brown said it had increased its orders and inventory to get ahead of further price rises, but assured supply levels were not an issue at present.
“We’re starting to see price increases coming through from our supply areas.”
Brown said there were obvious fuel and fertiliser price increases, but also second-order impacts and further flow-ons.
“Anything that uses especially fuel to be manufactured, shipped, transported. So if you look at plastics, resins, those areas we’re starting to see those price increases coming through.
“And that then will flow on probably to other general goods, as price inflation comes through in those other areas.”
He said manufacturers too were passing down the extra costs.
“We’re seeing it on our own product that we get manufactured coming through, that price escalation, whether that be shipping costs, whether it be manufacturing costs, through to end delivery costs.
“So we’re minimising as much as we can, but obviously we need to pass on those costs as they come through.”
Brown said it was pushing back as much as it could with suppliers to try to get the best deal for its farmers and growers, but expected the impact to be ongoing.
“The earlier we work with our farmers and growers in terms of what they need and locking that in, the better we can manage those price increases and give us certainty.
“We’re hoping that this will be short-lived, but we know even if there was resolution on Monday, the impact on the supply chain is going to last for quite some time.”
Brown encouraged farmers to talk with their representatives and plan what they might need over the coming months to try to get ahead of further price increases.
A PGG Wrightson store in Culverdon. Supplied
Meanwhile, agricultural service provider and rival retailer PGG Wrightson said it was also facing price increases passed onto them.
“Off the back of the significant increase in crude oil cost, we are seeing an increase in global shipping costs and local freight/distribution costs which are being passed onto us,” it said on its website.
“The increase in crude oil also applies to products or packaging made from plastic. Where able, we will continue to try to minimise price increases wherever possible.”
It said it was not experiencing supply delays at present, and was working with suppliers to find alternatives to countries that were restricting exports of commodities.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
