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little over two years ago, it was easier and more affordable for growers to purchase the items they need. Now, not so much.
The ag irrigation industry, like the rest of the world’s industries, is experiencing a disrupted supply chain resulting in shortages and increased costs on items from electronics to cable to plastic molded parts. Mix in a depleted work force and global logistics difficulties, and the agriculture industry continues to witness a time of high stress.
Supply chain issues
For the growers at the bottom of the agriculture industry’s supply chain, it can be easy to question why these extended lead times and lack of products are happening. The answer isn’t tied to one component of the supply chain but is more of a culmination of problems experienced by each player, says Carlos Estrada, director of supply chain for Rivulis Irrigation-North America, San Diego.
“We go all the way down this supply chain. Suppliers are having a hard time getting components or materials on time to provide their subcomponents,” Estrada says. “Because of that, the lead times are just extended.”
On top of extended lead times, it’s become difficult for manufacturers to meet product demands, says Joe Strickland, the vice president of global irrigation operations at Valmont Industries Inc., Omaha, Nebraska.
“Since our suppliers are facing similar issues with labor shortages, global pandemic, etc., it has become a cascading challenge when it comes to meeting supply chain demands,” Strickland says.
But the ag irrigation industry is witnessing a notable supply chain shift, says Paul Simmons, the product strategy director
at Senninger Irrigation, Clermont, Florida. This new trend follows one of optimistic improvement as most U.S. manufacturers are currently seeing some recovery from pandemic-induced raw material shortages, albeit with inflationary costs, to be able to produce their products.
“The ongoing effort now for the agricultural industry is to meet the robust demand from growers domestically and the strong agricultural markets globally,” Simmons says.
Global logistics
Due to the supply chain disruptions caused by the pandemic, as well as the recent conflict in Eastern Europe, Simmons says that globally, agricultural markets are investing in production capacity expansion in order to meet their own food security needs and are capitalizing on increased export demand for food and fiber.
“This creates challenges in availability for the growers’ inputs but also opportunities for those who are thinking strategically and adopting extended lead times in their procurement models,” Simmons says. “This is especially true of electronics but is universal for many of the products growers need in their operations.”
For companies relying on international exports for product parts and pieces, transportation has become another thorn.
Transportation prices are increasing as the need for shipping increases. There are shortages of shipping containers and drivers. Estrada says product transportation lead times have to account for congestion at ports, custom clearance and traffic of trucking companies picking up products at ports.
Estrada says that prior to the pandemic, Rivulis saw lead times from six to seven weeks. Now, lead times are anywhere from 11 to 13 weeks.
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