A Bigger Micro Scope
The sometimes "bit" performers of crop nutrients expect to play a greater role in the ethanol age.
September 9, 2008
For much of the 2000s, micronutrients have been something of a red-headed stepchild compared with other crop inputs. As macronutrient prices have stayed high, crop prices have been down, and fuel costs have risen on an almost weekly basis, it's easy to understand why micronutrients haven't recorded strong sales.
"Even when prices go high for major nutrients, growers aren't going to grow anything without the N, P, K (nitrogen, phosphate, and potassium) products," said Paul McCoy, Jr., president of NutriChem, a supplier partner to American Minerals, Dunedin, FL, when CropLife® interviewed him during the summer of 2006. "Unfortunately, the first thing that gets eliminated is micronutrients."
For further proof of this trend in action, consider the findings of the 2006 CropLife 100 retailers survey: When retailers were asked how their micronutrient sales performed during the year, only 49% reported experiencing an increase (compared to 84% for biotech seed and 65% for fertilizer). An almost equal number — 44% — said their micronutrient sales were flat during the 2006 growing season.
But — not to sound too cliché — what a difference a year makes. Going into the 2007 growing season, market observers are practically universally positive that this will be a fantastic year for micronutrients. The reason, of course, ties directly back to anticipated growth in overall corn acreage in the U.S. as the rapidly expanding ethanol market grows in leaps and bounds.
"It's shaping up to be an excellent year," says Jeff Ivan, manager of marketing and business development for Tiger-Sul Products, Calgary, AB, CAN. "Strong commodity prices, brought on by demand from ethanol producers, are expanding into virtually all crop types. I believe we are starting a major trend upward in agriculture, with crop prices staying high for many years to come."
More Corn = More Micronutrients
In a sense, say several market insiders, the expected boom times for micronutrients in 2007 is long overdue. According to most suppliers, U.S. growers have spent the past half-dozen years "mining" their soils when it comes to important micronutrients such as copper and zinc. "With crop prices low — around $1.70 per bushel for corn — not many growers were rushing to replenish their micronutrient levels, and they suffered some yield losses as a result," says Kip Smallwood, director of sales for Tetra Micronutrients, Inc., Houston, TX. "But with corn prices now topping $3 per bushel, and expected to go higher as demand increases, many of these same growers are very interested in finding ways to boost their yields. Putting down a fresh batch of micronutrients is one of the ways to do this."
Despite this threat to growth, however, most micronutrient suppliers are convinced 2007 will be a year to remember for everyone involved in the industry. At present, approximately 15% of the U.S. corn crop is utilized to produce ethanol. By 2010, this percentage is expected to double at the very least, say market forecasters.
"It's well-known that corn is one of the most input intensive crops around, and several million acres more of corn in 2007 should mean all crop inputs will be up, including micronutrients," says Kerry Green, managing director for Wolf Trax, Inc., Winnipeg, MB, CAN. "I fully expect crop prices to stay high enough that growers will be looking for every way possible to increase their yields. Basically, when all is said and done, this will probably be the closest to a 'can't miss year' for sales we will ever see."
Sfiligoj is the Editor for both CropLife and CropLife IRON magazines. He travels regularly to cover industry events and has been dedicated to the ag retail industry since he joined the staff in 2000.