Expert: Crop Input Prices A Mixed Bag

Corn FieldTotal variable input costs for the 2013 corn and soybean crops are likely to stay about the same as last year, a Purdue Extension farm business management specialist says.

Variable input costs are the costs of production that vary directly with the crop grown, but don’t include fixed costs, such as cash rent.

While some individual input prices are expected to increase, some will decrease and others will stay about the same. Fluctuations will serve to cancel out one another and to help keep overall variable costs fairly stable compared to last season.

Seed prices will make the biggest jump in the coming year, Alan Miller said. Corn seed is expected to increase by an average of 5-7%, and soybean seed prices are likely to increase more than corn.

“The drivers of higher seed prices in 2013 are higher commodity prices, tighter seed supplies due to the 2012 drought and prospects for strong crop returns in 2013,” he said. “Soybean seed prices are expected to increase more than seed corn prices because the cost of the commodity is a larger component of the seed price.”

Miller estimated seed costs per acre on average-yield farmland would increase by $8 for corn and $7 for soybeans.

Nitrogen fertilizer prices are climbing, too. Tight supplies and transportation problems could contribute to an increase of about 2-5% over last year’s already pricey nitrogen fertilizers, such as urea, liquid nitrogen (28%), or anhydrous ammonia.

But some nitrogen price relief could be on the horizon as the domestic fertilizer industry considers expanding production capacity to take advantage of abundant supplies of relatively cheap natural gas in the U.S., Miller said.

The price of another common fertilizer – potash – is down about 8% from last January because of abundant North American supplies. Those prices are expected to remain stable into planting season.

Phosphate fertilizer prices, while down almost 4% from last January, are expected to increase as spring planting season approaches.

“Ammonium phosphate products account for a large part of the phosphate fertilizer market in the U.S.,” Miller said. “Phosphate prices are expected to increase 1-3% into the spring of 2013 as suppliers rebuild inventories, and due to the influence of nitrogen in phosphate products.”

Prices paid for chemicals, such as fungicides, herbicides and insecticides, are expected to hold fairly steady, Miller said.

Propane prices are forecast at $1.60 per gallon for the fall of 2013 – up 8-10% from the fall of 2012, but down significantly from the fall of 2011. Diesel fuel will be down a projected 2-3% from last year, according to the most recent U.S. Energy Information Administration forecast.

“The state of the global economy and higher domestic oil and gas production are factors driving the forecast for diesel fuel prices,” Miller said.

Crop insurance premiums also are expected to be down as much as 4-5% in 2013 and interest rates remain flat and relatively low in Purdue’s variable cost estimates for 2013.

Leave a Reply

State of the Industry Stories

State of the IndustryAgriculture’s Troubled Waters
March 3, 2014
Water quantity and quality issues threaten to hamper agriculture on a wider scale in the not-too-distant future. Technology breakthroughs and improved practices are providing potential solutions. Read More
State of the IndustrySponsor Profiles: Simplot, SST And WinField Support CropLife State Of The Industry Report
January 8, 2014
The sponsor partners of the CropLife State of the Industry report have demonstrated ongoing leadership including their support of this report. Read More
State of the Industry2014 State Of The Industry: Agricultural Concerns Creep In
January 2, 2014
With many strong sales years under its belt, the agricultural community is hoping for another positive growth experience in 2014, but mindful of a few challenges that might keep this from happening. Read More
State of the IndustrySeed Systems Top Watch List
January 2, 2014
Retailers are closely following herbicide tolerance and drought resistance traits. Read More

Trending Articles

FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More
CropLife 100CHS To Build $3 Billion Fertilizer Plant In North Dakota
September 5, 2014
The fertilizer plant in Spiritwood will be the single largest investment in CHS history, as well as the single largest private investment project ever undertaken in North Dakota. Read More
EquipmentNew Holland Acquires Miller-St. Nazianz
September 3, 2014
The assets of Miller acquired as part of the transaction will become part of New Holland Agriculture, a CNH Industrial brand, building on a successful four-year partnership between the two companies. Read More
CropLife 100Pinnacle Acquires East Kansas Chemical
September 2, 2014
Ranked 82nd on the CropLife 100, East Kansas Chemical will operate as part of Pinnacle's Performance Agriculture brand. Read More
MAGIE 2014 ShowStopper
EquipmentJohn Deere Again Wins MAGIE ShowStopper Award
August 25, 2014
For the second consecutive year, John Deere was honored at the Midwest AG Industries Exposition (MAGIE) for its new R4045 sprayer. Read More
ManagementExpert To Discuss Farmland Value, Rent At Farm Science Review
August 18, 2014
While cropland values in Ohio increased in the past two years, they have remained flat in 2014, declining in some cases, according to an Ohio State University agricultural economist. Read More

Latest News

Equipment2014 Product Of The Year Voting
September 19, 2014
Many new products were introduced to the ag retail marketplace this year. From this group, CropLife IRON and its consulting partners have selected five finalists for the Product of the Year award. Please cast your vote today to help us determine the winner. Read More
Equipment2014 Farm Science Review Crowd Tops 2013 Show
September 19, 2014
The 52nd annual Ohio State University Farm Science Review welcomed more than 130,000 farmers, industry professionals, FFA students and agricultural enthusiasts during the three-day event. Read More
Seed/BiotechUSDA Approves Enlist Following Rigorous Review
September 18, 2014
Dow AgroSciences now awaits EPA registration of Enlist Duo herbicide, the companion herbicide to the Enlist traits, which is expected in the near future. Read More
BlendersYargus Appoints New Plant Manager
September 18, 2014
Steve Shaffer will direct and coordinate daily operations at the company’s Marshall, IL, manufacturing plant, where the Layco line of material handling equipment is produced. Read More
CropLife 100Pinnacle Acquires Kansas-Based Cedar Ridge Supply
September 16, 2014
Cedar Ridge Supply will operate as part of Pinnacle's Performance Agriculture brand. Read More
StewardshipSecretary Vilsack Highlights Innovative Conservation Ef…
September 15, 2014
Nearly $16 million in Conservation Innovation Grants (CIGs) will be awarded to 47 organizations to help develop cutting-edge ideas to accelerate innovation in private lands conservation. Read More
Seed/BiotechSyngenta Responds To Cargill Lawsuit
September 15, 2014
Syngenta believes that the lawsuit is without merit and strongly upholds the right of growers to have access to approved new technologies. Read More
Equipment2014 Farm Science Review Launches Mobile App
September 15, 2014
Smartphone and tablet users planning on attending the 2014 Farm Science Review can now download this year’s customized mobile application. Read More
CropLife 100Southern States Coop Grower Sets Georgia Soybean Yield …
September 15, 2014
Georgia farmer Randy Dowdy's soybeans yielded an astonishing 110.66 bushels per acre, crushing the previous record of 82 bushels-per-acre. Read More
NIMITZ Treated vs Untreated pepper plant
InsecticidesNIMITZ Nematicide Approved By EPA
September 12, 2014
NIMITZ is a novel, non-fumigant nematicide with simplified application features, user safety and an active ingredient with a unique mode of action. Read More
InsecticidesMarrone Bio Innovations Receives Patent For Chromobacte…
September 11, 2014
The patent is the first step for MBI in developing a commercially viable product to inhibit infestations of corn rootworm larvae across America and other regions. Read More
HerbicidesDow AgroSciences: Keeping The Pipeline Stocked
September 11, 2014
Dow AgroSciences is embracing product diversity to drive the company’s future. Read More
CropLife 100CHS Is Official Partner Of New St. Paul Ballpark
September 10, 2014
The new ballpark in St. Paul, MN, officially became CHS Field with Twin Cities-based CHS Inc. revealed as the naming rights partner. Read More
EquipmentHagie Honors Farming Stewardship Leaders
September 10, 2014
The Iowa Farm Environmental Leader award recognizes Iowa farmers as environmental leaders that are committed to healthy soils and improved water quality. Read More
Precision AgPlantBeat: Your Plants’ Pulse In The Palm Of Your Han…
September 10, 2014
A new agronomic monitoring and recommendation service from Phytech could rewrite the book on real-time plant health status monitoring. Read More
StewardshipCCAs Making Headway With 4R Program In Lake Erie Wester…
September 9, 2014
Certified Crop Advisers are implementing the 4R Nutrient Stewardship Certification program in Lake Erie's Western Basin to improve water quality. Read More
MicronutrientsMicronutrients Going Macro
September 9, 2014
Between 2014’s fantastic growing conditions and a heightened awareness on plant nutrition, the major players in micronutrients are gearing up for another big year. Read More
Crop InputsFMC Announces Cheminova Takeover
September 8, 2014
FMC Corporation today announced that it has signed a definitive agreement to acquire Cheminova, a wholly owned subsidiary of Auriga Industries. Read More