How Growers Should Respond to Volatile Input Costs Right Now
With fertilizer and fuel prices swinging in response to global events, many growers are asking the same question: How should you react when input costs are this unpredictable?
In a recent Cotton Companion podcast episode, Mark Rosenbaum of Terrain Ag offered a clear framework for navigating the volatility — one that shifts the focus away from short-term price swings and back to overall profitability.
- Focus on Margins, Not Just Prices
Rosenbaum’s biggest piece of advice is simple but critical: don’t get caught up watching individual price movements in isolation.
“I would encourage them to take a holistic look at their situation. That’s the combination of both input costs at either what they own them for or what they can get them for now, and compare that against the price that they expect to receive and pay attention to that margin there,” Rosenbaum says.
While rising input costs can feel like a negative, they don’t tell the full story. If commodity prices are also improving, margins may actually be holding steady or even improving. The key is evaluating both sides of the equation together.
- Don’t Overreact to Volatility
Another major theme from the episode is just how quickly conditions are changing. From geopolitical tensions to supply disruptions, markets are moving fast.
“Volatility has been the name of the game throughout all of this,” Rosenbaum says.
That kind of environment can tempt growers to react quickly, but Rosenbaum’s perspective suggests a more measured approach. Not every price swing requires a decision — staying grounded in a broader strategy can help avoid costly overcorrections.
- Protect the Downside
With so many unknowns still in play, Rosenbaum also points to the importance of managing risk where possible.
He suggests considering “some sort of a price floor or downside protection,” Rosenbaum says.
The goal isn’t to eliminate opportunity, but to guard against worst-case scenarios while leaving room to benefit if markets move in a favorable direction.
With global uncertainty continuing to influence both input costs and commodity prices, the situation remains fluid, and one growers will need to navigate carefully as the season progresses.
Listen to the full podcast here: https://www.cottongrower.com/companion/how-the-strait-of-hormuz-impacts-your-operating-margins/
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