Agriculture industry watcher says just-in-time buying can relieve supply chain chaos

Martha Montoya, Agtools CEO, talks about how supply chain snags are hitting the equipment needed for U.S. agriculture.

Video Transcript

ADAM SHAPIRO: This issue of getting the parts you need if you need a tire for your combine or some piece of equipment, do yours-- does your software help them in that regard? Are there ways to streamline that?

MARTHA MONTOYA: Well, specifically the software not, but what it does is understanding how the market is moving and how the market has moved for the last 25 years will allow the farmers to understand when to go for the parts so they don't get inventory to sit on it because it's cash sitting on the deck. So it will help them understand the production worldwide and how it impacts them locally, even a local farmer in Detroit, for example.

SEANA SMITH: Martha, give us a sense just of what you're hearing. I guess how prevalent is this supply-chain issue and how many farmers that you're dealing with day in and day out or that you hear from on a weekly basis are struggling as a result of this?

MARTHA MONTOYA: Oh, definitely in the last-- it didn't-- it wasn't that bad the first-- even, believe it or not, the first three months of last year when we went through this pandemic because we thought it was going to be just a little bit and then we will go back to normal, but not longer is normal.

So the farmers are continuously concerned that there's not enough trucks, not enough truck drivers. There's not enough parts. There's not enough trucks to take to the ports. So it's a whole supply chain that it's impacting everyone. And especially as I say to people, once you plant a strawberry or you plant anything, you have only so many days or weeks to be able to ship that out, and that's what you are dealing with as a farmer.

ADAM SHAPIRO: I would imagine too that the data and the software that you provide for farmers that they don't have to operate necessarily a just-in-time inventory is what I hear you saying. And yet some of these supply-chain issues, could we-- is part of it panic buying on people who are stocking up because they fear they might not be able to get it in the future?

MARTHA MONTOYA: The reality is that the supply chain has been impacted all along for the last 40, 50 years. Those of us who have been in the farming world have known this. It was just a matter of time as the world will realize it. But we have been always walking on this very thin line of potential disruptions, whether it was an earthquake, whether it's a war, whether it's a trade war between two countries. There has always been-- this became exponential for everyone.

So definitely what it does is the market-- the whole-world market impacts everyone and starts clogging the systems in different parts of the world. A problem between Taiwan and China on a pineapple expands to Costa Rica and the United States and Philippines and even Kenya and the Middle East. So it is really now we're so tied-- the globalization is so tight that now all the farmers have to play in that playground, which is the world globalization.

SEANA SMITH: Martha, you have almost 30 years of experience in this in food and agriculture and supply chain. So from your perspective and from your experience, what is the best way-- what needs to be done to address these issues that we're seeing today?

MARTHA MONTOYA: I think the number one is for buyers-- specifically our buyers across the world to start getting more educated on how the-- what's the production of the world and when production happens. We have been continuously researching what the consumers want, but nobody has really done a report of what the Earth produces and when it produces. And I think once the buyers start understanding that, they will adjust to buy when there's enough and not buy too much when there's not enough and pass on to the consumer to explain that, hey, you can only have strawberries certain times of the year. You can only have some part-- and I think consumers will be responsible enough to understand that that's what they're going to buy and that's what they're going to get and focus on that.

ADAM SHAPIRO: Do you think we might see, though, the prices that are going up not come down? I ask this because I use what I call the black bean index.

MARTHA MONTOYA: Oh, no.

ADAM SHAPIRO: I buy black beans all the time. I'm paying $1.49 for one brand. Used to be $1.29. And they grow this stuff in North and South Dakota. So you just said, oh, no, prices won't come down. Why not?

MARTHA MONTOYA: No, they will definitely not come down because definitely the cost number one, labor, across the world. It's not just the United States. I can tell you around the world, different countries are having the labor issues. Young generations are not staying in the farm. They're not motivated to stay in the farm.

The second part is the inputs. Everything that we have to produce for them to be used-- and remember, many of us are going very organic, and that requires a completely different set of inputs. So it's not going down. Definitely we're going to stay, and we might go a little bit higher for a while.