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Illinois crop production costs could hit record highs this spring — Fertilizer prices are a driver • Farm Policy News

DTN writer Russ Quinn reported last week that “Most fertilizer retail prices were slightly higher in the third week of January 2022. But as was the case last week, a the fertilizer was inferior in price with one month back.

Seven of the top eight fertilizers were slightly higher, although none increased significantly. DTN denotes significant movement as anything of 5% or more.

DPA had an average price of $863 per tonne compared to last month, CARD $932/tonne, urea $916/tonne (historical high), 10-34-0 $800/tonne, anhydrous $1,433/tonne (historical high), UAN28 $585/tonne (historical high) and UAN32 $683/tonne (historical high).”

“DTN Retail Fertilizer Trends”, by Russ Quinn. DTN (January 26, 2022).

Quinn pointed out that “10-34-0 reaches $800/tonne for the first time in this historic increase in retail fertilizer prices. The last time it was this high was the first week of March 2012 when starter fertilizer was $807/tonne.

“Like last week, the price of a fertilizer was slightly lower than a month ago. Potash was down slightly and had an average price of $807/tonne.”

“Analyst Predicts Adequate Fertilizer Supplies, Little Price Relief This Spring,” by Daniel Grant. FarmWeekNow (January 25, 2022).

Also last week, Daniel Grant told FarmWeekNow that “farmers should to be able to get fertilizer for the upcoming spring season in most parts of the state, despite tight supplies.

“Corn prices should stay near historic peaks, according to Josh Linville, Director of Fertilizers for StoneX. He discussed the market outlook at the Illinois Fertilizer and Chemical Association’s annual convention in Peoria.

And in a separate FarmWeekNow article last week, Daniel Grant reported that “A sharp rise in input costs, driven by soaring fertilizer price, put farmers are set to plant the most expensive crops on record in Illinois this spring.

“This is according to the latest estimates of agricultural production costs and equilibrium prices published by the farmdoc team at the University of Illinois.

“Get ready for a high-cost year,” said Gary Schnitkey, soybean industry chair in agricultural strategy at Island University. “In 2022, I don’t see much of a cost reduction.”

Grant explained that “Total maize costs on highly productive land central illinois are tied to $1,064 per acre in 2022 (vs. $915 last year) with soy estimated costs at $785 per acre (compared to $652 last year), based on farmdoc estimates. If it came true, it would be corn costs for the first time on average more than $1,000 per acre in Illinois.

“Soybeans closed the week at the highest price since May as harvest problems in South America boost the outlook for global demand for U.S. oilseeds. Beans for March delivery to Chicago rose 1.5 % to reach $14.70 a bushel (“Commodities’ Dizzying Week Amid Fed, Nor’Easter in Five Charts”, by Sophie Caronello. Bloomberg News (January 29, 2022)).

Nonetheless, Lisa Foust Prater reported last week to Successful Farmer that, “As far as these input levels go, Schnitkey says, ‘That’s just the reality and it’s going to increase our profitability levels.’ Yet, he says, ‘Right now, if we look at prices for fall delivery, it could be a profitable year.'”

And on Thursday, Russ Quinn told DTN that “A Russian invasion of Ukraine will most certainly be affect the global fertilizer market, but to what extent is not known. Several factors, including what sanctions Russia would see and whether these punishments included crop nutrients, would dictate how fertilizers are affected.

“We know that a conflict in the Black Sea region likely to reduce the outlook for cheaper fertilizer prices for US farmers in 2022, according to fertilizer analysts.

Margarita W. Wilson

The author Margarita W. Wilson