Harvest Land Coop

(From June 2008 Harvest Land Newsletter)

By Jim Boyle - Crop Nutrient, Crop Protection Division Manager

The fertilizer market continues on its bullish run with strong global demand for all nutrients. The factors which have driven the fertilizer industry over the past couple of years are similar to those driving the energy market. Consider these comparisons.

First, most of the supply we depend on comes from other nations. Second, demand is currently outpacing production. Third, output from new production being built around the world won’t hit the market for a couple of years. Fourth, world events over which we have no control cause huge supply and price fluctuations. Finally, we end on this happy note: prices are strong, and industry experts don’t see much relief in sight.

If there is any good news in this, it lies in the fact that unlike the energy market, the fertilizer market is both driven—and somewhat offset—by high commodity prices for corn, wheat, and beans. It’s driven by the fact that high commodity prices push producers to fertilize heavily and increase yields, boosting input demand. However, high-priced commodities also cushion the input sticker shock on the back end.

We anticipate that when grain markets start to trend downward for an extended period of time, we will see the input costs follow.

It’s the little things
Strangely, with the big numbers we’re throwing around, it’s the little management things you can do that add increased profitability to your farming operation. Higher commodity prices lower your thresholds for weed and insect competition. Plan ahead, scout your fields earlier than you have in the past, and spray according to the need you find in each field. With the increase in glyphosate
prices, look at adding a tank mix partner to prevent additional spraying and/or paying higher prices for additional glyphosate.

Also, consider spraying your corn and soybeans with fungicide. I expect we will see a large percentage of the Midwest sprayed with fungicides due to the return on investment and positive results seen last year in Illinois, Iowa, and Indiana. Don’t wait too long, however. We currently have a good supply but expect to sell out.

With the great commodity prices we’re experiencing, every extra bushel you can pull from your acres this summer will help offset the input costs we’re experiencing today and next year. We look forward to helping you capitalize on every opportunity throughout the summer to ensure the best outcome this fall.

go back