Editor's Note: Farm Futures continues a new ongoing series taking a more in-depth look at key input prices for the 2008 crop year. While higher crop prices have been good news on the farm, there's a bad-news scenario building for fertilizer costs. Our coverage continues with a look at the results of our online survey about this issue.
Nearly nine out of ten farmers say they will change crop rotation choices or modify input rates due to high anhydrous prices.
According to the online poll posted by www.FarmFutures.com from Nov. 15 to Dec. 1, 88.46% of farmers would change practices or rotation choices when anhydrous prices hit $550 per ton. The poll attracted more than 2,600 replies.
Currently many Midwest fertilizer dealers are pricing anhydrous well above the $550 per ton figure. Some fertilizer experts say retail anhydrous prices will continue to climb into spring, despite the fact that Reuters reports wholesale prices at the Gulf remain steady at around $300 per ton. Prices out of the Black Sea, a major exporting hub, fell for most of the fall, but turned higher recently.
Nearly 5% of those surveyed said they would not change rotation or input rates until anhydrous hit $600 per ton. Around 3% said their magic number was $650 per ton. Only 1.4% said they would not change rotation or input rates at any price for anhydrous.
Many surveyed expressed frustration at the current fertilizer situation. "Early pay in my area is already $650 per ton, and in-season (price) is unknown," said one farmer who responded to the poll. "All fertilizer prices are a complete rip-off," said another. "Everyone I have talk to is cutting back 10 to 20%, some even more on everything!" Still another said, "We can't justify the input cost!"
Most survey comments reflected a strong desire to switch from corn to soybeans if anhydrous prices remain high. A sampling of comments:
- "At $10 beans, why plant corn?"
- NH3 price is already up fifty dollars a ton in my area. I just ordered seed corn that was $50 a bag higher than last year (same number but RW), and I can lock in October "cash" corn for $3.63--nine cents higher than what I contracted corn for this year. Where is the incentive to grow corn?"
- "Beans look better all the time, even two years out."
- "If we all plant beans, better price them this winter and hope the weather cooperates."
- "Beans, beans, beans, beans!!!!"