Cautious Optimism On Fertilizer In 2017

Fertilizer application
Because soils have been tapped heavily the last two seasons due to record yields, growers may have no choice but to replace nutrients to keep their yields up.

What kind of fertilizer rates are growers and retailers looking at in 2017 and beyond? According to stakeholders CropLife magazine checked in with, the answer lies in just how badly fields need nutrients — and how much it will cost.

The consensus is that soils have been tapped heavily the last two seasons. “In fact, since the drought in 2012, nearly every year has been a really good year,” says Tim Mundorf, Field Representative with Midwest Laboratories. “And in the last two years in my area, a lot of guys have had even back-to-back record yields in either corn or soybeans, sometimes both.”

He’s seen growers planning for 200-bushel corn and fertilizing accordingly, then actually getting 220 or 230 bushels. It’s the same scenario that exists for beans, with a producer targeting 60-bushel beans, then pulling off 65 or 70 bushels.

Will growers replace? Mundorf says they almost have to, to keep yields up. He does admit they’re a little more cautious, making suppliers explain why they need what’s recommended. “They might cut a couple pounds here or there, especially on rented ground, but for the most part guys are covering what they’re taking off,” he says. Then too, growers need to fertilize to match the demands of the latest high-yielding hybrids that have performed so well for them, he adds.

In any case, customers are definitely not pulling back on soil testing, as Mundorf reports that soil sample volumes have held steady over the past two years. “Farmers are making sure they replace at least some of what they’re taking out — and setting themselves up for more record crops,” he says.

Fertilizer Costs

A huge factor going forward with needed fertilizer purchases is clearly price. “I think these are some of the best fertilizer prices we’ve seen in a few years, and unless you’re fighting high land cost, it’s a wise decision to put back where you might have cut over the last few years,” says Eric Gordon, Plant Manager with BRANDT, Lincoln, IL.

Crop nutrients have done their job in terms of getting fertilizer prices closer to the value of where corn and beans are today, says Daryl Warren, Vice President of Agronomy with Ceres Solutions, Crawfordsville, IN.

But he notes that nutrient spending has to fit in with overall costs — as growers calculate a return per acre with all the other inputs they have to manage. “Crop protection is a big piece of that. Seed is a big piece of that,” he says. “Quite frankly, cash rents need to adjust in order for all that to flow like we’d like to. We don’t have control of some of those segments.”

More acres planted won’t necessarily be the answer for retailers. Warren cites projected planting estimates at 89 million to 90 million acres of corn, down 4 million from last year. Plus there are new seed platforms and crop protection products everyone needs to work through, he notes, that will complicate business in 2017.

BRANDT’s Gordon says that while growers may be looking for ways to save, they may regret cuts later, potentially losing yield. Some of his customers experienced this in 2016 when they reduced spending on crop protection and faced tough-to-control weed problems.

The continued softening of fertilizer prices in recent months could translate into another year of lower fertilizer prices for producers, says David Widmar of Agricultural Economic Insights and Purdue University. The declines have created the potential for another round of significant per acre cost reductions in fertilizer expenses — to the tune of $16 per acre lower than in 2016.

Ceres’ Warren noticed recently that a couple of products may actually be a little firmer as ag goes in to spring — based on manufacturers balancing supply to demand. “Potash looks a little stronger, who knows about the nitrogen complex with some N production offset by some exports and import ratios,” he says. “Phosphate will kind of be flat to firm.”

In Rabobank’s October 2016 Agri­business Review, analysts point to one industry development that may impact the fertilizer segment going into 2017 and beyond — Agrium and PotashCorp announcing their “merger of equals,” creating one of the largest global integrated producers and sellers of nitrogen, potassium, and phosphate. “Farmers could stand to benefit incrementally in the event that lower prices follow the achievement of enhanced economies of scale resulting from the recent mergers,” the report says.

Leave a Reply

State of the Industry Stories

Fertilizer Tender close-up
MicronutrientsHow Micronutrients Fit Into 2017 Fertility Plans
January 10, 2017
Where do micronutrients stand going forward in fertility plans? For one thing, Tim Mundorf, Field Representative with Midwest Laboratories, says Read More
Asmus Farm Supply crop protection products in storage
State of the IndustryCrop Protection Products Market: Complexity Begets Opportunity
January 10, 2017
While other key market segments in agriculture continue to see tumultuous shifts in sales volumes going forward (large equipment sales are Read More
Pioneer corn seed in storage
Special ReportsState Of The Seed Industry: Better Later Than Never
January 3, 2017
Traditionally, the majority of the nation’s grower-customers made their seed planting decisions in the late fall. Normally, when folks attended Read More
DTS10 Sprayer Hagie
Special ReportsAg Retailer Buying Intentions Survey: Looking A Lot Like 2016
January 2, 2017
In the early 1970s, when reporters Bob Woodward and Carl Bernstein were first looking into what would become the Watergate Read More
Trending Articles
Migrant farm workers
LegislationTrump: Immigration Crackdown Won’t Impact U.S. Agriculture
May 16, 2017
President Donald Trump said he would seek to keep his tough immigration enforcement policies from harming the U.S. farm industry Read More
AGCO Ratliff featured
Eric SfiligojRemembering Robert Ratliff
May 15, 2017
With all the fast-paced happenings in agriculture this spring, with multiple mergers in the works and planting season in full Read More
Case sprayer nozzle closeup
EquipmentSpray Application: A Nozzle Renaissance
May 2, 2017
If you had asked four-decade ag veteran Mark Bartel, President of Wilger Inc., just a few years ago what lay Read More
ManagementWashington Update, Dow-DuPont Earnings, and the Passing of an AGCO Legend
April 27, 2017
Editors Paul Schrimpf and Eric Sfiligoj talk about the latest Beltway news, crop protection company 1st quarter numbers, and the Read More
Crop InputsFlying Under the Radar No More, FMC Goes Big
April 13, 2017
Describing FMC as “under the radar,” admittedly, is probably a stretch. But in a snap of the fingers, FMC upped Read More
Young Corn Plants
Crop NutritionStill Hunting Yields
April 1, 2017
There’s no denying it — the agricultural marketplace today is undergoing a fundamental shift in fortunes. Not too many years Read More
Latest News
ManagementTrip Report, PSM R.I.P, and Ag’s Reaction to Federal Bu…
May 25, 2017
Editors Paul Schrimpf and Eric Sfiligoj talk about their recent travels, the end for Process Safety Management (PSM), and how Read More
Corn soil
LegislationARA Member Testifies Before Senate Ag Committee
May 25, 2017
Agricultural retailers stand on the front-lines of the American economy. As trusted advisors to America’s farmers, ag retailers are uniquely Read More
Young corn plants in soil
Crop InputsFortenza Insecticide Seed Treatment Receives EPA Regist…
May 25, 2017
Fortenza seed treatment insecticide from Syngenta has received registration approval from the U.S. EPA for use on corn and cotton Read More
ManagementFarm Market iD’s Agriculture Database Now Covers More T…
May 25, 2017
Farm Market iD, farmmarketid.com, has announced the release of its 2017 Annual Update of its farm and land database. The Read More
Food IT Fork-to-Farm
Precision AgThe Mixing Bowl Event Connects Technology, Food, and Ag…
May 24, 2017
For the fourth consecutive year, The Mixing Bowl presents FOOD IT, under the theme “Fork to Farm.” Action-oriented entrepreneurs, industry Read More
Photo credit: The United Soybean Board/The Soybean Checkoff.
Seed/BiotechKansas State University Researchers Find New Pathogens …
May 24, 2017
A single seed seems so simple. Put it in the ground, give it some care, and you’ve soon grown food. Read More
Soybean Field
HerbicidesNew Dicamba Herbicide Premix Coming Soon from Syngenta
May 24, 2017
Syngenta has announced the name of its new herbicide featuring the active ingredients of S-metolachlor and dicamba. Upon registration by Read More
Eric SfiligojMonsanto ‘Picks Its Battles’ by Nixing Deere Deal
May 23, 2017
Having been in the trade journalism game since the mid-1980s, I remember several watershed moments during my career. One of Read More
FungicidesSyngenta Launches New Seed Treatment Fungicide
May 22, 2017
Syngenta has announced the launch of PLENARIS seed treatment fungicide for the control of downy mildew in sunflower. PLENARIS contains Read More
Corn close up
Crop InputsMonsanto’s First HPPD Herbicide Garners EPA Appro…
May 19, 2017
Monsanto announced today that EPA has federally approved Harness MAX Herbicide, the first herbicide in the Monsanto portfolio to provide Read More
ManagementPrecision Planting Deal, China Developments, and Enviro…
May 18, 2017
Editors Eric Sfiligoj and Dan Jacobs discuss the latest news on John Deere’s now dead deal for Precision Planting, China’s Read More
Soybean aphid leaf
InsecticidesMulti-state Research Reveals IPM Best Option for Treatm…
May 17, 2017
About 89.5 million acres of soybeans will be planted across the U.S. in 2017 — a record high, according to Read More
GROWMARK-2017-Interns
CropLife 100GROWMARK Names 2017 Summer Interns
May 16, 2017
Forty-two college students are exploring agricultural career opportunities this summer as GROWMARK interns. They are working at FS member cooperatives Read More
Migrant farm workers
LegislationTrump: Immigration Crackdown Won’t Impact U.S. Ag…
May 16, 2017
President Donald Trump said he would seek to keep his tough immigration enforcement policies from harming the U.S. farm industry Read More
Flooded corn in Indiana
FertilizerBoth Wet and Dry Conditions Threaten Nitrogen Loss
May 15, 2017
The weather is notoriously unpredictable, leading to challenges for planting, harvesting and applying the nitrogen (N) your corn crop needs. Read More
farmer Kip Tom
Precision AgAg Tech: On the Cusp of Something Big?
May 15, 2017
The investment and ag-tech sectors’ continuing courtship of agriculture, smoldering for three or four years now, was well in evidence at Read More
AGCO Ratliff featured
Eric SfiligojRemembering Robert Ratliff
May 15, 2017
With all the fast-paced happenings in agriculture this spring, with multiple mergers in the works and planting season in full Read More
Greg Musson, Gar Tootelian
ManagementOpinion: Shaking Your Perspective in Ag Retail
May 12, 2017
Some of you I’m sure have encountered our recently retired salesman extraordinaire, Dan Bellanger. He worked in the industry for Read More