By Ryan Hanrahan
Reuters’ Naveen Thukral and Ed White reported that “the world’s farmers face soaring fertilizer and fuel prices as the war in the Middle East escalates, leaving some scrambling for supplies as the spring planting season approaches.”
“Prices in the United States, which imports much of its fertilizer needs despite a large domestic industry, rose at the war’s outbreak,” Thukral and White reported. “Prices for fertilizer jumped from $516 per metric ton on Friday to up to $683 at the import hub of New Orleans on Thursday. Prices could jump higher if the Persian Gulf closure persists and shipments can’t make it in time for spring planting, analysts told Reuters. ‘Literally, this could not happen at a worse time of the year,’ said StoneX analyst Josh Linville.”
“Seth Meyer, former U.S. Department of Agriculture chief economist and now at the Food and Agricultural Policy Research Institute, said farmers might alter crop choices and fertilizer applications due to the price spike,” Thukral and White reported. “Farmers need fertilizers for virtually all their crops if they want a good yield, but each crop and the soil they are grown in have different demands. Farmers could cut back on corn, which requires high rates of nitrogen fertilizer, or else sharply reduce fertilizer application rates, Meyer said.”
AgWeb’s Tyne Morgan reported that “the most significant planting implications may fall on corn. Corn is far more fertilizer-intensive than soybeans, particularly when it comes to nitrogen. When fertilizer prices rise sharply, the relative profitability of soybeans often improves quickly. That dynamic was already influencing acreage expectations even before the conflict escalated.”
“‘Now with the fertilizer situation and the effects of the war, I think you could see additional acres move out of corn to beans,’ (Chip Nellinger, founder and partner of Blue Reef Agri-Marketing) says. ‘Particularly on the fringe areas,’” Morgan reported. “He doesn’t expect the shift to dramatically alter planting plans in the highest-producing Corn Belt counties. ‘Maybe not so much in the 50 or 60 million acres right in the heart of the I-states with the highest-yielding ground,’ he says.”
Source : illinois.edu