Late last week my inbox started blowing up about some potentially HUGE news in the crop protection industry related to a major supplier of Glyphosate. It didn’t take long for these rumors to materialize when a letter from their global head of manufacturing addressed to “whom it may concern” started circulating. The terminology, Force Majeure, was used. While this terminology might not be familiar w/ everyone in the industry, I’ve actually heard it used before and thought I would shed some light as to it’s meaning in simplest terms…
What is Force Majeure?
A lot of times when companies enter into agreements w/ third parties to deliver products, whether complete widgets or components of widgets, there are typically clauses in the contracted agreement between parties that allow each party an out if they need it based on unforeseen circumstances. The understanding typically is that these “unforeseen circumstances” are usually HUGE, catastrophic, type events that are deemed extraordinary and beyond the control of one party (typically the party delivering the goods). When force majeure is declared, this gives the party the ability, more or less, to not deliver on their contract w/ the other party.
How does this apply to the Glyphosate market?
In this particular situation, it appears that one party, Bayer, had an agreement w/ a third party to provide a component or process related to the manufacturing of Glyphosate. Just a little backstory… I did a post a while back explaining why crop protection products were short this season, summarizing a series of events. Since that post there’s been hope that Bayer, one of the largest manufacturers of Glyphosate (if not the largest producer), would start releasing supply into the marketplace. In my opinion, this temporarily softened the glyphosate market and there was an overall sigh of relief that (a) yes, there would be enough product to go around (even if it cost more than usual), and (b) growers wouldn’t have to look for alternative chemical plans for the 2022 growing season… well, this news from Bayer has certainly stirred up a hornets nest as I’m sure you can imagine.
Related Content on this Story…
Here’s a collection of articles on this topic that I’ve collected in a few hours:
- Bayer Declares Force Majeure, Deepening Glyphosate Crisis
- As Bayer Warns of More Glyphosate Shortages, Here’s How Severe the Situation Could Be this Spring
- Bayer warns glyphosate supply could be disrupted
- Bayer Declares Force Majeure, Says Production of Glyphosate May be Curtailed
- Glyphosate concerns after Bayer calls force majeure
- Link broken in glyphosate supply chain, Bayer says
- Bayer says production of glyphosate may be curtailed
- How Did FBN Do The Impossible And Source Glyphosate for 2022? It Was Costly, But Paying Off Now
Questions or Comments?