Surging input costs and questions about fertilizer prices and availability have some farmers reconsidering their planting intentions.
A private survey conducted by grain merchandiser Farmer’s Keeper shows a sizable cut in corn acres since USDA’s March Prospective Planting report. Remember, the USDA survey was fielded in early March before the full impact of the war in Iran was felt. Since then the fertilizer supply crunch and price spike might have forced some farmers to move away from corn last minute.
Farmer’s Keeper asked nearly 4,000 of its customers in 27 states the following question: “Since fertilizer prices have risen, how have your corn acres changed?”
The results show:
- No Change - 76%
- Decrease - 20.3%
- Increase - 3.7%
“We just saw in March a surprisingly high to many of us corn acreage number from USDA and a relatively lower soybean number,” says Nick Tsiolis, CEO, Farmer’s Keeper. “What that tells us is potentially we might start to see those numbers converge with corn acres coming down and soybean acres coming up.”
Acreage Shifts Tied to Fertilizer Prices and Supplies
Tsiolis says the fertilizer supply crunch is one factor causing last-minute shifts.
“What we’re hearing from the co-ops is many farmers are not even going to be able to get the fertilizer they want,” he explains. “Even if they wanted to increase their corn acres, they wouldn’t be able to do that.”
The near-record high prices, especially for urea, are also playing a role in the decision, according to Tsiolis.
“When you get a price spike in fertilizer, with already a challenged ag economy out there, it’s going to lead the farmer to say, ‘Man, I’m spending several hundred dollars an acre more to put in this corn crop for relatively less profitability when I could put in some bean acres and almost know that at least at today’s current prices, I’m going to break even or a little bit better.’”
A fertilizer study conducted by the American Farm Bureau Federation shows 67% of Midwest farmers pre-booked fertilizer. Where are the shifts likely to come from?
“I think if we’re going to see any kind of big movement from the March intentions for corn and soybeans, it’s probably going to come from the fringe area,” says Brian Grete, CommStock Investments. “I will include [that area] up into the Plains and the northern Plains and down through the South and Southeast. Those are the areas where we could see the biggest shift.”
There probably won’t be many acreage changes in the central Corn Belt, he says, so the crops most at risk are peanuts, cotton and others specific to the South.