High world fertilizer prices will not only continue to affect farmers’ utilization rates but also affect production decisions in the coming year.
The Farm Business Network (FBN) and global Agro Technology (AgTech) platform have just released the first fertilizer price transparency report. This is considered an in-depth survey into how fertilizer prices remain at a high level will affect farmers’ utilization rates this fall and new planting decisions next year, especially fertilizer. protein.
The report is based on the FBN member’s input fertilization rate compiled from the fall fertilizer bill, and the farmers’ 2022 crop estimate to provide forecasts for crop planning. the year 2023.
FBN’s analysis shows that there is quite a large difference in fertilizer prices between regions – especially for nitrogen fertilizers (nitrogen fertilizers). The reason is attributed to the lack of transparency in the market, the price is likely to have an impact on the 2023 planting plan.
The results of the fertilizer market survey in 2022 and the impact of excessive price increases on farmers’ fertilizer-cutting rates and planting decisions in 2023 are the most comprehensive study to date. on this topic.
“With natural gas prices remaining high and major market disruptions due to the Russia-Ukraine conflict, we do not expect world fertilizer prices to be flat,” said Kevin McNew, chief economist at FBN. often return to keep up with the farmers’ 2023 crop production plan. The huge regional variation in fertilizer prices – as the price of nitrogen fertilizer is twice as high as that of potash fertilizer – could be a sign of the lack of transparency we have warned about in other input markets, such as seeds”.
According to Kevin McNew, the lack of transparency on fertilizer prices can significantly affect the return on investment (ROI), tighten operating budgets and make it even more difficult to plan next year’s crops. harder for farmers in an already challenging environment.
The FBN and AgTech report also provides new recommendations to farmers who plan their nitrogen fertilizer formulations, providing U.S. corn farmers with an assessment of the fertilizer market, expected yields, and prices. expected product sales.
This free tool uses data from 12 U.S. Corn Belt universities that aggregated nitrogen fertilizer formulations across the states over 20 years to calculate the maximum rate of return.
Experts see that high fertilizer prices may cause farmers to adjust fertilization rates and crop selection in the next seasons, especially with nitrogen-based products. This report is based on annual price increases across the United States for anhydrous, potassium, monoammonium phosphate, urea ammonium nitrate and diammonium phosphate fertilizers. Accordingly, in the past two years, the price of UAN fertilizer has increased by nearly 200% and the price of DAP fertilizer has increased by 112%. This has resulted in a significant change in nitrogen fertilization rates for maize, wheat and cotton across the country.
According to FBN, unlike the grain market, fertilizer prices in the US are not publicly listed by retailers or agribusiness agents and fertilizer suppliers.
The survey results have just been released, 17% of FBN farmer members said they will reduce the rate of fertilizer application this fall and may continue to limit it next year. In addition, members also said plans to sow crops such as corn, soybeans, wheat, cotton and sorghum in 2023 compared to 2022. Wheat emerged as a marginal crop. Profitability is high in 2023 when 43% of farmers said they would increase the area of wheat next season, while 24% chose corn and 22% chose soybean.
More specifically, the plan to intercrop wheat and soybeans is also likely to be higher as the plains and southeastern states are likely to increase acreage this fall and follow up with next spring’s crop. help with nitrogen supplementation. Thus, there is a significant difference in production between regions as the sowing rate of nitrogen-intensive crops in the south and east is likely to decrease by 2023.