Fertilizer companies must adjust not to blindly pursue high yields

Fertilizers are produced all year round, but in winter, farmers use very little fertilizer, and they need to store the more produced fertilizers.
This is winter storage.
However, this year due to the sharp drop in international oil prices, lower prices of agricultural products, overcapacity of fertilizers and other factors, dealers' enthusiasm for winter storage has been unprecedentedly low.
Many dealers have basically given up winter storage, and the pressure has been concentrated on the side of production companies.
Faced with this new situation, industry insiders said that fertilizer companies must adjust their production models and can no longer blindly pursue high yields.
Distributors stopped and watched.
Speaking of this year's winter fertilizer storage, a salesperson from a southern urea plant shook his head.
He said: "We have some estimates for the difficulties of this year's winter storage, but we did not expect the situation to be so severe and the market so cold.
As usual, distributors will start winter storage in October, but the start time of this year's winter storage Continue to postpone, but continue to be disappointed.
Now in January, farmers are about to use fertilizer, and the price has fallen to a new low in more than 10 years, but dealers are still waiting and unwilling to store them in winter, and manufacturers are under great pressure.
"An expert in the industry said that this year’s winter storage of chemical fertilizers is not limited to individual companies, nor in a certain region, but a national phenomenon.
It can be said to be the worst year for winter storage in the past years.
, There are many dealers abandoning storage.
The expert analyzed that dealers were unwilling to store in winter due to four main reasons: First, dealers were afraid of falling prices and making losses.
During the winter storage period this year, the price of chemical fertilizers has been falling.
In the early winter storage period, some dealers lost more than 100 yuan per ton.
Later dealers were even more afraid of winter storage when seeing this situation.
Second, the efficiency of logistics and distribution can no longer be the same as in the past.
Now roads and railways are very developed.
In the past, I was worried that the train skin was tight and had to be shipped in advance.
Now the train capacity is abundant, and the shipment is very timely.
Farmers’ demand for fertilizer can be met at any time, and they no longer need to stock up first as in the past.
Now the necessity for dealers to stock up has been drastically reduced.
Third, the lower prices of agricultural products have a great impact on dealers’ mentality, and dealers are afraid of farmers.
Reduced planting enthusiasm, reducing the amount of fertilizer; Fourth, poor international demand.
The price of chemical fertilizers continues to fall due to continuous losses.
With the abolition of preferential policies, the cost of chemical fertilizer production is rising, and many fertilizer companies are in a state of loss.
According to analysis by industry insiders, with such a low urea price, it is estimated that about 90% of urea companies are losing money.
A urea company in the south said that now they are biting the scalp in production, with a loss of more than 100 yuan per ton of urea.
If the price continues to fall, the company will go bankrupt.
So, why doesn’t the company stop production when it loses? According to the analysis by Lu Jianzhong, assistant to the general manager of the sales branch of Henan Jinkai Company, there are two main reasons: one is that the fertilizer companies consider maintaining stability.
Once the company stops the car, the employee’s salary will even increase.
Employment will be affected and unstable factors will appear; Second, the company is still seeking a marginal benefit.
Whether it is a breakeven or a slight loss, it is more worthwhile than stopping.
Therefore, the operating rate of urea plants across the country is still high.
Experts suggest to adjust the model Guo Wen, manager of Hunan Toyota Agricultural Materials Company, believes that now is the time for fertilizer companies to change their concepts and adapt to the new situation without winter reserves.
Fertilizer production is continuous large-scale production, and the equipment is in operation all year round, while the use of chemical fertilizers has obvious seasonality.
Therefore, when farmers use fertilizers in the off-season in winter, distributors pay to book fertilizers to solve the seasonal shortage of funds of manufacturers and ensure the centralized supply of fertilizers when the peak season arrives.
Winter storage is also vividly called a "reservoir.
" But now the role of this "reservoir" is obviously declining, and dealers' enthusiasm for winter storage is decreasing.
In the future, it will be a new normal for dealers not to store or store less in winter.
Guo Wen believes that under this situation, fertilizer companies should strengthen close cooperation with distributors on the one hand, reduce the risk of distributors’ winter storage by means of Federal Reserve joint marketing and guaranteed interest calculation, and mobilize their enthusiasm for winter storage.
They dare to store in winter and are happy to store in winter.
On the other hand, production companies must adjust their off-season production methods.
When there is difficulty in taking goods and a serious backlog of products, fertilizer companies should actively and decisively reduce the production load, rather than blindly reduce prices.
Enterprises cannot simply think that full-load production is a good thing.
Facing the increasingly severe winter storage situation, fertilizer companies must establish an off-season production mechanism to actively adjust output according to market demand, and all follow the principle of minimum corporate losses.
A person in charge of the marketing of a chemical fertilizer manufacturer in Guangxi said that distributors are reluctant to store in winter, and fertilizer companies can increase direct sales and sell chemical fertilizers directly to large growers and farmers.
The low-price sales of chemical fertilizers are still tempting for farmers to reduce their planting costs.
Some farmers are willing to save fertilizer now, and they are also worried about the price increase during the peak season.
Enterprises should broaden their marketing channels and cannot hang themselves on a tree.
From the perspective of future development, it is an inevitable trend to reduce intermediate links and move closer to end consumers.