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World
Fertilizer Demand Squeezes U.S. Supply, Increases
Prices
Worldwide potash demand is growing faster than the
industry can produce it, and some U.S. farmers may have difficulty
obtaining it when they need it this spring, says Alan Miller, a Purdue
University Extension farm business management specialist. Supplies will
also likely be tight for certain forms of nitrogen (N) in some areas of
the country this spring, as well, he adds.
“The whole fertilizer industry is working at full capacity to meet
demand right now, but with the rapid increase in global growth, this may
take awhile to sort out,” says Miller. “In the short run, there is
concern about the industry’s ability to ship all the products needed
to all the places they’re needed, particularly in areas where
railroads have less interest in moving anhydrous ammonia.”
Yet, product availability will likely be less of a concern to most
Midwestern farmers this spring than price, says Sebastian Braum, West
Coast agronomist, Yara North America. “I think we will have enough
fertilizer product available where it’s needed, but it’s not going
to be cheap,” says Braum. “Potash prices will be very high this
spring, but that’s what it will take to get it into the U.S. It will
have to be profitable enough to suppliers to bring it here, because the
rest of the world is competing heavily for it.”
Production capacity has been unable to keep up with the rapidly growing
demand, agrees Braum. “So, potash prices continue to trend up and no
one knows where they will stop,” he says. “In comparison, N prices
are fairly flat right now, but as spring planting starts in the Midwest,
both urea-ammonium nitrate (UAN) and anhydrous ammonia prices will
likely go higher.”
Contrary to recent media reports, the increase in demand for all
fertilizer types is more about increased global wealth and the lower
dollar than an increased demand for ethanol, says Braum. “The
expansion of ethanol is causing maybe only 5-10% of the problems in
current fertilizer capacity,” he says. “The rest is due to the
increase in world demand. It’s up everywhere, but especially in China,
India and Brazil.”
Fertilizer prices are currently at all-time highs for all
fertilizer materials, largely due to increased global wealth and demand,
confirms Kathy Mathers, v.p. public affairs, The Fertilizer Institute.
“World fertilizer demand from 2001 to 2006, has grown 14%, which
represents the size of a whole new U.S. fertilizer market,” she says.
“China, India and Brazil are the areas where fertilizer demand is
increasing the most. As those economies develop, their citizens are able
to purchase more than rice –- they’re able to purchase more meats,
fruits and vegetables, which is increasing the demand for fertilizers to
grow those foods.”
The increased demand is causing an increase in prices, adds Mathers.
“Compared to January 2000, fertilizer prices in January 2008 were
about 130% higher, according to the USDA,” she says. “In addition,
since 1999-2000, the U.S. has lost about half of its N production
capacity, which is largely due to high and volatile prices for natural
gas, the main cost component in N fertilizer production.”
Now, instead of N coming from U.S. sources, U.S. retailers and suppliers
are mostly buying N from foreign sources, where natural gas has been
cheaper, she says. However, a falling U.S. dollar is now increasing the
price to import foreign fertilizer products. “When the dollar falls
and companies sell product into the U.S.,” says Mathers, “those
importers have to raise their prices just to keep even on their
investment.”
With the falling U.S. dollar and the rising natural gas prices in some
foreign-sourcing countries, importing fertilizer from other countries is
becoming more expensive, agrees Miller. At some point soon, it may
become more profitable to produce N fertilizer in the U.S. again, he
adds.
In the last six months of 2007, N imports into the U.S. increased 34%
compared to the imports during the last six months of 2006, notes
Miller. “The sheer logistics of handling that amount of product could
pose some problems, especially now with higher prices for oil,” he
points out. “On the other hand, the big increase in imports into the
U.S. last fall also suggests N supplies are in better shape going into
the spring of 2008 than the spring of 2007.”
Farmers who are still trying to decide whether to plant more corn or
soybeans this spring should make sure they’ll have enough fertilizer
on hand to meet their potential needs, advises Miller. “Right now,
because corn prices are up relative to beans over the last few days, it
looks like there’s been a shift where the profit margin for the
average producer in Indiana is a little better for rotation corn than it
is for rotation beans, but that could change in an instant,” says
Miller. “The profit margin still favors rotation beans over continuous
corn. Single-crop wheat actually looks more profitable than continuous
corn here at this point, given our estimates. There will probably be big
price swings back and forth between corn, soybeans and wheat not only
until these crops are in the ground, but also throughout the growing
season and even after they’re harvested.”
To help compare potential profit margins between crops in Indiana,
Miller advises downloading the 2008 Purdue Crop Cost and Return Guide by
clicking here: www.agecon.purdue.edu/extension.
By John Pocock
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Estimate 2008 Corn Production
Costs
Let me state up front that the information contained
here is taken from the best sources I can find. Trying to come up with
something original would be reinventing wheels.
Each year several entities try to estimate the cost of production for
various crops. The University of Missouri (MU) Food and Agriculture
Policy Institute (FAPRI) has one of the better budgets. You will see
cost of production that are updates from the latest budgets published by
FAPRI, along with some explanation of what I see happening that made me
modify it.
To continue reading this article from the March 14, 2008 issue of the MU
Integrated Pest & Crop Management newsletter, and to view
estimated cost of production charts for corn and soybeans, click here:
ppp.missouri.edu/newsletters.
By Ray Massey, University of Missouri
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Do New Corn Hybrids Need Less
N?
How much trust should farmers put into recent
marketing claims that newer corn hybrids can use nitrogen (N) fertilizer
more efficiently than older ones?
“Corn yields have increased over the years, but the N fertilization
rate to achieve those yields has not,” says John Sawyer, Iowa State
University (ISU) Extension soil fertility specialist. “This means that
the efficiency of N use has increased.”
Yet, farmers should also note that selecting hybrids with newer
transgenic traits is no guarantee that those hybrids will use N more
efficiently than comparable, non-transgenic hybrids, adds Sawyer. “We
have looked at the N fertilization rate need for some of the newer
genetic traits, specifically [for] Bt rootworm [resistance] in
continuous corn and corn after soybeans,” he says. “Our work has not
shown an optimum N rate difference compared to what we would typically
expect with hybrids that do not have that trait.”
Using an N rate closer to the optimum rate will help to improve
efficiency for any hybrid, whether transgenic or not, points out Emerson
Nafziger, University of Illinois Extension agronomist. “All the major
corn breeding companies have announced that they are making corn more
efficient in N use,” he says. “It is possible that they’ve found a
gene that increases the ability of the roots to take up N, either
through their regular screening or through transgenic methods. It’s
also possible that you could obtain higher yields with genetics that
improve root systems without having to pour a lot more N onto your
fields.”
Another possibility is that corn breeding companies may have found
hybrids that are more efficient in using the N that corn plants do take
up from their roots, he adds. “Roughly two-thirds of the N in corn
plants ends up in the grain,” says Nafziger. “If the percentage
going into the grain could be raised, that would also be an improvement
in efficiency.”
In general, the chance of N deficiency is probably lower with newer corn
hybrids than with older ones, notes Nafziger. “Today’s hybrids, with
their bigger root systems, are better at taking both N and water from
the soil,” he says. “So, newer hybrids tend to yield more than older
hybrids from the same amount of N.”
Even with high-yielding hybrids, research data in Illinois shows
no consistent correlation between high yield and high N rates, says
Nafziger. “It’s an extreme example, but in one on-farm N-rate trial
in 2007, corn following corn yielded 250 bu./acre with just 130 lbs.
N,” he says. “In other cases, relatively high amounts of N are
needed for only average yields. Because we don’t know in advance what
will happen in an individual field, we use all the data that we can find
and average it together to help us calculate the right rate.”
In particular, N rates tied to expected yield of corn after soybeans are
often just too high, says Nafziger. “Farmers typically think that
higher yields require more N,” he says. “To some extent, that may be
true, but some of the N may come from the soil rather than from more N
fertilizer.”
Midwestern university researchers have tried to bring more rationality
to the N-rate debate, says Nafziger, by developing the Corn Nitrogen
Rate Calculator, which is available online at: extension.agron.iastate.edu/soilfertility.
This calculator uses actual yield response data, plus the price of corn
and the price of N to give farmers a recommended N rate.
“High-priced corn doesn’t mean you can just pour on any amount of N
to increase yields,” says Nafziger. “The ratio for dollars/lb. of N
to dollars/bu. corn determines the best rate, and that ratio has been in
the vicinity of 1 to 10 for some time – from 20¢/lb. N and $2/bu. of
corn to 50¢/lb. N and $5/bu. of corn.”
The Corn Nitrogen Rate Calculator was first released in 2005, notes
Sawyer. “We still have thousands of hits on its Web site, which tells
me that this tool is still being used,” he says. “All the changes in
corn and N prices have kept the interest high in using the Corn Nitrogen
Rate Calculator to make decisions on profitable N rates.”
Some corn farmers could probably afford to cut back on N and still
maintain yields, says Sawyer. “The idea that higher yields require
significantly higher N rates is a tough concept for farmers to get
past,” he says. “Some folks are still struggling with that, so the
right N rate is still an issue. However, our research data shows that
the fertilization requirement for corn has not gone up as yields have
increased.”
For more information on determining the correct N rate for corn in the
Midwest, click on the following PDF Web link: www.extension.iastate.edu/Publications.
By John Pocock
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How To Be An
Energy Miser
Which part of your operation uses the most energy?
Many growers would say tillage trips are their farm's energy hog.
Conventional tillage requires about 4.5 gal./acre more than no-till or
strip-till, but surprisingly it's not the largest energy user. Crop
drying is actually the energy villain in Corn Belt operations, according
to a study of 50 Iowa growers.
So says Shannon Gomes, who co-created a farm energy audit spreadsheet.
He is owner of Cedar Basin Crop Consulting, Waverly, IA, and co-owner of
MGT Envirotech, a consortium examining on-farm efficiencies and
sustainability. Gomes is secretary of the National Alliance of
Independent Crop Consultants (NAICC) and past president of the Iowa
NAICC.
To simplify decisions, the energy audit translates all farm energy use
to gallons of diesel fuel equivalent (GDFE). “The surprising thing was
that the two biggest energy consumers are drying costs and nitrogen (N)
fertilizer for corn,” Gomes says. “They represent 10 times the
potential energy savings of tillage. This was a real eye-opener.
To keep reading this article on how best to save energy costs on the
farm, click here: cornandsoybeandigest.com/ag-issues/energy-saving-tips-0215/.
By Susan Winsor
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Statement By
The President On The Farm Bill
The Congress has agreed on legislation to extend
current farm programs to April 18, 2008. I will sign this legislation to
avoid serious disruptions that might result if the current law is
allowed to expire without a responsible farm bill enacted in its place.
Farmers and ranchers deserve to know the structure of policies that
affect their day-to-day business activities, and right now they face
uncertainty.
Throughout this process, my goal has been, and remains, to sign a good
farm bill. Over one year ago, following listening sessions across the
nation, the Department of Agriculture unveiled a reform-minded and
fiscally responsible approach to supporting America's farmers and
ranchers. My proposal would provide agriculture producers with a safety
net that better targets benefits and provides funding for emerging
priorities. Today's farm economy is very strong, and Congress should not
miss this opportunity to reform current farm programs.
To continue reading the president’s statement on the farm bill, click
here: www.whitehouse.gov/news.
To read more information about extending the current farm bill, click
here: cornandsoybeandigest.com/ag-issues/news/0312-senate-vote-extend-farmbill/.
Source: Office Of The Press Secretary
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Consider
Fertilizer Near The Seed
High fertilizer prices have stimulated thinking about
banding instead of broadcasting phosphate (P) and potash (K). This is
reasonable and logical because research at the University of Minnesota
has clearly shown that the broadcast rates for P and K can be cut in
half if applied in a band for corn production.
So, it seems appropriate to summarize some tips that have been learned
for placing fertilizer close to the seed at planting. For many reasons,
the old 2×2 placement is not popular among farmers. There is no reason
to use the 2×2 placement when fertilizer placed either with or close to
the seed has produced positive results. Some points to remember follow.
To continue reading this article about items to think about when banding
fertilizer, click here: minnesotafarmguide.com/blog/?p=79.
By George Rehm, University of
Minnesota
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More Than Just
Manure
If corn is king in the Midwest, hog manure is
certainly a member of the royal court.
“Not too many years ago, if you had hog manure, you just wanted to get
rid of it,” says Gyles Randall, professor and soil scientist at the
University of Minnesota (U of M) Southern Research and Outreach Center.
“But with increased fertilizer costs and the nice growth responses
(corn) growers have seen, hog manure has taken on a real positive
light.”
U of M trials have demonstrated that corn yields average 10.7 bu./acre
more when soil is fertilized with hog manure (applied during spring)
compared to commercial fertilizer applied at a non-limiting nitrogen (N)
rate.
Northern Illinois grower Kim Huntley built two 2,000-head swine
finishing barns in 2002 to diversify his 3,000-acre corn and soybean
enterprise. The resulting manure has been a nice boon, says Huntley.
To continue reading this article about the benefits to corn from hog
manure, click here: cornandsoybeandigest.com/corn/research-shows-manure-helpfuf-0215/.
By Karen Bernick
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How
Biofiltration Can Keep Nitrates Out Of Our Water
Richard Cooke of the University of Illinois (U of I)
Urbana-Champaign, will present “Removing Tile Drain Nitrates with
Biofiltration” at 1:30 p.m. on Tuesday, March 18, by video link to
Ohio State University's Wooster, Lima and Columbus campuses.
The free public talk will cover how biofiltration works, how well it
works, whether it can remove other common tile pollutants and the
microorganisms that take out the nitrates. “The potential for leaching
of nitrates in agricultural fields with subsurface drainage can increase
the risk of nitrate contamination in surface waters,” says Cooke, a U
of I associate professor in the Department of Agricultural and
Biological Engineering. “Biofiltration, which uses a buried trench
filled with wood chips through which the tile drainage water flows, has
been shown to be effective in reducing nitrate levels.”
For more information on the March 18 talk, contact Mary Wicks, (330)
202-3533, wicks.14@osu.edu. For
more information on how biofiltration works, visit the following Web
link: agronomyday.cropsci.uiuc.edu.
Source: Ohio State University
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Stop
Nitrogen Losses From Urea Fertilizer Applications
South Dakota State University (SDSU) research provides
some guidelines that can help determine when nitrogen (N) loss, or
volatilization, is likely to occur with surface-applied urea. The
urgency of the question increases if rainfall is limited for a week or
two after spring applications, says Ron Gelderman, SDSU plant science
professor.
“Urea is the most common N fertilizer source in South Dakota,” says
Gelderman. “It is susceptible to loss when the urea is converted to
ammonia by the urease enzyme found in all soils and on all residues.
Since this is a enzymatic conversion, warmer temperatures and moisture
tend to increase the conversion process.”
The soil will trap ammonia if the urea is incorporated into the soil.
However, for no-till conditions, producers don't often have that option,
and typically urea is broadcast on the soil surface.
“If we receive ¼ to ½ in. or more of rainfall, losses are small
because the urea is dissolved and moved into the soil,” says
Gelderman. “However, a small rain or even heavy dew can produce more N
losses by increasing urease activity with limited N movement into
soil.”
To continue reading this article about minimizing N loss from urea
fertilizer applications, click here: agbionews.sdstate.edu/story.cfm?id=3347.
Source: South Dakota State University
Extension
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When
Fertilizing, Go Easy On The Sea Salt
There has been a recent increase in calls to
University of Missouri (MU) Extension wondering about the fertilizer
benefits of sea salt. Sea salt, like table salt, is primarily sodium
chloride. It typically contains 2% other minerals, but the content can
be higher in some sources. The other minerals can include potassium,
calcium, magnesium and some micronutrients, with the exact content
varying from source to source.
MU research has shown limited response to micronutrient fertilizer on
Missouri soils and there are soils in Missouri that require additions of
phosphorus (P) and potassium (K). Use soil testing to document soil
deficiencies of P and K and soil testing and plant tissue testing to
evaluate micronutrient deficiencies in crops. For more information on
micronutrient deficiencies, see the MU IPM guide 1016, Crop Nutrient
Deficiencies And Toxicities, available online here: extension.missouri.edu/explorepdf.
If you can document a deficiency in one of these nutrients, then is sea
salt a good fertilizer to supply these nutrients? The short answer is
no.
To continue reading this article, from the March 14, 2008 issue of the
MU Integrated Pest & Crop Management newsletter, click here: ppp.missouri.edu/newsletters/ipcm.
By John Lory, University of Missouri
Extension
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Even
More Deer Control Tips: A Note From The Corn E-Digest
Editor
Corn E-Digest readers continue to write to me
with tips on preventing deer feeding in corn fields. Here are two of the
most recent recommendations to come across my computer screen:
Kim Siefkas, from Colorado, writes this: “My sister lives in Colorado
Springs and some of the neighbors did not like the deer being around.
They got some lion manure from the zoo and scattered it around and sure
enough the deer left. Of course now they are seeing mountain lions –
drawn by the smell of the lion dung. Someone suggested they could get
rid of the mountain lions by getting some tiger dung. But who wants
tigers in their back yard! Maybe the deer weren't the worst problem. Of
course, tigers are afraid of elephants!”
Jed Welder, who farms with his father Ned at Windy Ridge Farms, near
Greenville, MI, writes this: “I read with interest your article on
deer damage. In western Michigan, light red kidney beans seem to be the
meal of choice for our booming white tail deer population. Last spring,
two of us would go out on ‘deer patrol’ just about every evening
during the month of June. We find that lead poisoning seems to be the
best deterrent -– and our deer seem particularly susceptible to the
.30-30 and .243 Winchester. Although time consuming, this is a much more
cost-effective solution as opposed to the cost of deer fencing. Our
Department of Natural Resources (DNR) has been very responsive with
damage permits and we have had interest from our local food kitchens for
the meat.”
If you’re like these readers and have comments or tips for others to
try on topics related to corn production, please write to me (John
Pocock) at: jpocock@csdigest.com. As always,
you’re also welcome to write to me if you have concerns or questions
about this issue.
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