https://www.google.com/amp/s/wjla.com/amp/newsletter-daily/cost-of-food-expected-to-rise-with-fuel-fertilizer-impacted-by-war-in-ukraine-russia-money-inflation-prices-high-gas-wheat-bread-basket-russian-ukrainian-vladimir-putin-volodymyr-zelenskyy

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Nigh says that U.S. production is projected to be steady this year, which is good news for American consumers, compared to other countries that are more import-dependent.

The war between Ukraine and Russia also impacting things.

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According to one farmer--

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"It was running $700/ton a year ago and it's like $1,400 to $1,450 the last I heard," said Steve Standridge, a farmer in Oklahoma.

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Of all the institutions on this planet, the people in this room ought to have a pretty damn good idea about how bad this farming season is going to be--- from a procurement and economic stand point.

So----- Farmers---- how freaking bad is this about to get?

Fertilizer was already getting very expensive way before Russia Russia Russia

im confusrd on why the cost of fertilizer is bad for farmers, are those costs not pushed down to the consumer at the end of the day?

what are the best publicly traded companies that a person can buy stock of in this space?

Misinformation!!!

Who needs farmers, regardless of fertilizer!? I shop at HEB!!!

Bag said:

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im confusrd on why the cost of fertilizer is bad for farmers, are those costs not pushed down to the consumer at the end of the day?

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Not like you would think. The price they get paid lags behind the jump in fertilizer. Guys in Chicago keep the gravy.

Bag said:

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im confusrd on why the cost of fertilizer is bad for farmers, are those costs not pushed down to the consumer at the end of the day?

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So say fertilizer costs per acre has doubled. Which it has. And other costs have doubled or up substantially. Like diesel fuel, chemicals, custom application and harvest, seed, etc.
So it is a sure thing that the cost to grow the crop is WAY more than it was last year. The problem is that the person planting the crop has no idea what the planted seeds will produce this year. It all depends on the weather.
Big risk that has to be managed with insurance and marketing. Which is the same every year but much more so this year due to huge price increases of inputs. FJB.

What percentage is fertilizer in total production costs, say for corn?

Bag said:

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im confusrd on why the cost of fertilizer is bad for farmers, are those costs not pushed down to the consumer at the end of the day?

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Farmers do not control what price they sell at, they can't pass anything along to the consumer. Price paid to farmers is set mainly by overall supply and demand. Cost of production is not really in that equation, at least not in the same sense as a manufactured good. The way that the price of fertilizer gets put into the equation, and this can swing prices, is that fewer farmers will plant corn. More soybeans will be planted, and as such corn will have less supply and a similar demand, therefore the price will go up.

I'm not a farmer or an economist, just my understanding as someone who grew up in a ag based community.

If I'm a farmer, I just hold onto my crops until all the supply has run out and then sell at a premium. Sure the corn might be a bit mushy by then, but it should bring in three times as much!

If y'all think fertilizer is expensive now just wait until Democrats start directly attacking fertilizer production due to its energy consumption (read, climate change). Thus aggravating an existing problem and completing the cycle of being Democrats.

Funky Winkerbean said:

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What percentage is fertilizer in total production costs, say for corn?

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I asked this the last time we had this discussion on fertilizer costs but no one seemed to know.

We are in for a sheet show this year for agriculture production. The crops being consumed at this time were not produced with inflated fuel, fertilizer, chemical costs. Those crops will be produced in 2022. Prepare your anus.

Food prices gonna go much higher at HEB.

Why?

Because fertilizer is so expensive farmers and ranchers can't afford it. Less product yield. Less stuff at HEB.

More money consumer pays.

More inflation.


FJB

agracer said:

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Funky Winkerbean said:

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What percentage is fertilizer in total production costs, say for corn?

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I asked this the last time we had this discussion on fertilizer costs but no one seemed to know.

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180 to 250 lbs of nitrogen fertilizer per acre for corn.

https://www.farmprogress.com/grains/fertilizer-recommendations-proving-valid-even-increasing-corn-yields

https://www.agweb.com/opinion/how-much-more-will-2022-crop-cost


Even though corn will return more than beans, the total cost per acre for corn is about $963 compared to about $683 for soybeans. This means that working capital requirements for 2,500 acres is about $700,000 higher for corn versus soybeans.

normaleagle05 said:

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If y'all think fertilizer is expensive now just wait until Democrats start directly attacking fertilizer production due to its energy consumption (read, climate change). Thus aggravating an existing problem and completing the cycle of being Democrats.

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Democrats are full of fertilizer.

I'm looking for some chicken **** fertilizer from the Asians now. Or even turkey ***** Better than nothing.

Anyone got contact for this?

normaleagle05 said:

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If y'all think fertilizer is expensive now just wait until Democrats start directly attacking fertilizer production due to its energy consumption (read, climate change). Thus aggravating an existing problem and completing the cycle of being Democrats.

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Yep. There's a reason there's a nitrogen plant near many refineries.

With all the bull shyt coming out of DC, we should have plenty of fertilizer.

agracer said:

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Funky Winkerbean said:

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What percentage is fertilizer in total production costs, say for corn?

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I asked this the last time we had this discussion on fertilizer costs but no one seemed to know.

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https://farmdocdaily.illinois.edu/2021/10/2022-planting-decisions-nitrogen-fertilizer-prices-and-corn-and-soybean-prices.html

I'm not a corn farmer, but fertilizer is about 1/2-2/3 the non-land cost for my hay production. Here's what the Fighting Illini say:



https://farmdocdaily.illinois.edu/2021/10/2022-planting-decisions-nitrogen-fertilizer-prices-and-corn-and-soybean-prices.html

evan_aggie said:

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agracer said:

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Funky Winkerbean said:

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What percentage is fertilizer in total production costs, say for corn?

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I asked this the last time we had this discussion on fertilizer costs but no one seemed to know.

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180 to 250 lbs of nitrogen fertilizer per acre for corn.

https://www.farmprogress.com/grains/fertilizer-recommendations-proving-valid-even-increasing-corn-yields

https://www.agweb.com/opinion/how-much-more-will-2022-crop-cost


Even though corn will return more than beans, the total cost per acre for corn is about $963 compared to about $683 for soybeans. This means that working capital requirements for 2,500 acres is about $700,000 higher for corn versus soybeans.

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Not sure I follow your math. How many applications of fertilizer are made in a growing season?

And one more graph from the Illinois paper:



Very good correlation between corn prices and nitrogen prices.

Not a farmer here. Just google'd and posted links for people to read and excerpt.

A good friend who farms corn said his fertilizer bill was twice as much this year than last and that was way before Russia.

agracer said:

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Funky Winkerbean said:

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What percentage is fertilizer in total production costs, say for corn?

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I asked this the last time we had this discussion on fertilizer costs but no one seemed to know.

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About 25 percent. Just an estimate as the big variable is land cost per acre which can vary greatly depending on location/ yield history.

Mas89 said:

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agracer said:

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Funky Winkerbean said:

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What percentage is fertilizer in total production costs, say for corn?

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I asked this the last time we had this discussion on fertilizer costs but no one seemed to know.

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About 25 percent. Just an estimate as the big variable is land cost per acre which can vary greatly depending on location/ yield history.

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How much fertilizer is applied per acre in a typical season?

Need cheap corn to power our cars.

What is it about Biden that made fertilizer and oil producers so greedy?

Long time lurker, first time poster. Family in southeast Texas and interned for an ag company southwest of Houston 10 years ago while in college.

I farm in Southern Iowa, raising corn, soybeans, and milo. The I states, (Illinois, Indiana, and Iowa) make up a huge % of the corn grown in the US. While current day fertilizer prices are incredibly high, what most articles don't talk about that in this region alot of our dry fertilizer (phosphate and potash) is applied in the fall after harvest along with a large % of our nitrogen needs in the form of anhydrous ammonia. Prices for last fall had doubled over what they were earlier that spring. For example, anhydrous for fall of 2021 was around $750/ton and had to be locked in late summer to get that price. I paid $495 a ton in the spring just a few months earlier. Potash was around 550 a ton and MAP (phosphate) was in the low 700s. In the fall of 2020, I paid 330 for potash and 430 for MAP.
For this spring, I just booked my spring anhydrous for some farm ground I picked up over the winter and it cost me 1500 a ton. So 3 times more than a year ago. I apply around 200# of actual nitrogen an acre so what cost me around 60 bucks an acre last spring will cost me 180 bucks this spring.

Here's a rough budget figuring for 175 bushel corn. Like I said, I farm in Southern Iowa which isn't as productive as central and Northern Iowa so we don't plan on as big of corn yields

Nitrogen - $180/acre
Phosphorous- $37.50/acre
Potash - $27.50/acre
Sulfur- $15/acre
Seed corn- $92/acre
Herbicide- $40/acre
Fungicide- $30/acre
Fuel - $20/acre
Crop insurance- $30/acre
Hail and wind insurance- $15/acre
Equipment cost - $40/acre (this cost varies greatly by grower, if they run new equipment or older and what kind of breakdowns)
Rent - $200/acre (this number gets bigger the better the ground is)
So it is going to cost me just shy of $750/acre to put the crop in. Prices today are currently around $6/bushel. Profits look to be good, but missing rain in July and August can greatly change this so there is alot more risk this year because production costs are double to triple.

Soybeans costs are roughly the same except take out the nitrogen cost and the seed cost goes from 92 to 66 bucks an acre. We go in to the year hoping to raise 55 bushel soybeans and can currently get $14/bushel for new crop. Some growers who don't have their nitrogen on are looking plant soybeans again on fields that had soybeans last year just because they are a little less risk and takes less money to raise. But there is usually a few bushel yield hit than raising soybeans that was planted after corn. We don't have the soils to raise corn on corn like they do in Central iowa so we are always in a rotation with corn and soybeans or milo and soybeans. (I plant milo on my tougher less productive soils because it takes less money and less risk and I have an end user lined up. There is very little milo grown in Iowa).
One thing I hate about these articles is we farmers have no say in the price we get. It changes daily on the board of trade. I have forward contracted some for fall at these prices, but you can't get carries away selling because if you don't get the right weather and don't raise enough crop to cover your contracts then you either have to buy out of them or buy grain off your neighbors to fill your contracts. I roughly have 30% sold ahead right now.
Chemicals are in short supply, still alot that hasn't been shipped to our retailers which is concern with planting about a month away.
Fertilizer for the most part is still available and hasn't seem to be a supply issue, just takes more money to buy it.
Parts are very hit and miss to get and new tractors and implements aren't in any better shape than the automotive industry with several things 6+ months out to get which has driven the used market way up. Hope this gives you all an idea of rough costs for a Midwest farmer.
Btw, you guys got screwed out of the tournament. I'm a huge hawkeye fan so hoping it's our year to make a run. Casual aggie fan with family who's graduated from aTm.

agracer said:

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Funky Winkerbean said:

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What percentage is fertilizer in total production costs, say for corn?

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I asked this the last time we had this discussion on fertilizer costs but no one seemed to know.

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I'm a crop consultant and this is what I do. Fertilizer costs last year on the upper gulf coast of Texas for dryland corn (similar to cotton) was approximately $75-100/A. That covered about 120 units of nitrogen and 20-40 phosphorus and 20-30 potassium (so 120-40-20). This season we have cut back to the absolute absolute bare bones and planning on adding some mid season if the weather is good so we are running with about 60-10-5 for now with a few spots pushing closer to 100-30-15. We are averaging $140-180/A for dryland and irrigated is pushing $250/A and that's with less fertilizer than we had last year. Average corn crop yield is about 110-120 bushels of corn and 1.5-2 bale dryland cotton.

Fertilizer, seed, and rent makes up the bulk of our expenses with chemicals and equipment not being far behind. For basic math let's break it down like this

Fert: $200/A
Seed: $80/A
Rent: $100/A
Chemicals: $60/A

Then you got fuel, equipment, insurance, and labor.

September corn futures trading around 6.60 today so average corn crop gross profit is $660/A. Cotton around a dollar and if we have an average crop of 1000 pounds (2 bale) we are looking gross profit of $1000/A (cotton also has more fuel and a lot more chemical expense).

Cotton is profitable still, corn is not IMO unless you can store it and get a good basis. We need corn to be over $7 and really closer to $8 with better than average yield to hope to make any profit.

This is far and away this most expensive crop we have ever put in and we just put the seed in the ground few weeks ago and we anticipate it getting worse

And prices have been elevated ever since Biden took office. We were finally seeing commodity price improvement after Trumps trade agreement. So this has nothing to do with Russia, yet. Now with Russia shutting off ammonia we are about to get in serious trouble I'm afraid.

black_ice said:

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Food prices gonna go much higher at HEB.

Why?

Because fertilizer is so expensive farmers and ranchers can't afford it. Less product yield. Less stuff at HEB.

More money consumer pays.

More inflation.


FJB

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Maybe, but reality is that a $1 loaf of bread at the store has about $0.02 worth of wheat in it. The cost for that loaf of bread also includes a lot of manufacturing, transportation, and overhead for everyone except the wheat producer. The price of fuel and labor impacts the cost of a loaf of bread more than the cost of fertilizer, but the farmer gets the pinch

Following the far-hotter-than-expected CPI print, analysts expected Producer Prices to extend their acceleration,

and they did rising 10.0% YoY in February (vs +9.7% YoY in January), hitting double-digits for the first time since Bloomberg data began.


Also notable is that January's PPI data was revised higher, from +9.7% to +10.0% YoY.

Source: Bloomberg

This is the 21st straight month of MoM rising producer prices.

Really depends on the area and soil test.

gonemaroon said:

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what are the best publicly traded companies that a person can buy stock of in this space?

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Mosaic would be the best publicly traded pure fertilizer company to buy IMO. Prices nearing an all time high on fertilizer after the Russia invasion and they probably had their spring inventory on hand and priced before the price run up this year. With a low P/E ratio and huge profits coming, should be a good buy even at todays price.

Fertilizer costs had already run up prior to Russia because of the sanctions on Belarus (remember when they grounded the commercial airline to arrest the journalist). The main export of Belarus is Potash, a major source of potassium fertilizer.

Furthermore, most urea (ammonia) production is from natural gas. So blaming Russia/Ukraine for fertilizer costs is the same as blaming gas/diesel prices on the war. Yes, the war has exacerbated the price, but it was already sky high thanks to our dumbass "leaders".