Figuring corn fertilizer costs
Apr 17, 2003 12:00 PM, By David Bennett Farm Press Editorial Staff
Seed dealers are doing brisk corn business. “Some accounts we've gotten indicate that some dealers have doubled their corn seed sales from last year,” says William Johnson, Pioneer field sales agronomist and former Arkansas Extension corn specialist.
This would surprise some people who thought the high cost of fertilizer might lead some farmers to shy away from the crop.
“A lot of long-time corn producers have learned to lock in their fertilizer prices. Many locked in nitrogen prices in December and will pay $175 to $185 per ton of urea.
If a farmer is paying $180 per ton of urea and is making 150-bushel corn (which typically requires 180 units of nitrogen), then he's staring at around $36 per acre for nitrogen,” says Johnson.
If a farmer didn't get his urea booked (and is paying around $240 per ton), “he's looking at around $47 per acre for nitrogen. If urea prices spike to $300, the cost for nitrogen will run farmers over $59 per acre.”
It's believed that the price of urea will stabilize around $240 because plants have started producing it again. Natural gas prices have topped and are easing down.
Johnson says 240 units of nitrogen are required to achieve 200 bushels per acre of corn. At $180 per ton of urea, the price for fertilizer is $48 per acre. At a cost of $240 per ton, an acre will run over $62. And if prices for urea climb to $300 per ton, an acre of fertilizer on a corn crop will cost a shade over $79.
“Even with a high nitrogen price, you're looking at around $10 to $12 more per acre to grow corn. That's equivalent to about 4 bushels of corn.”
Marketers were expecting an 81 million acre corn crop. But with the high fertilizer prices, they're now saying up to 3 million acres may switch back to soybeans.
“That would seem to firm up corn prices.”
In Arkansas, Johnson isn't seeing many producers switching cotton ground to corn.
“Guys doing that are typically in a cotton/corn rotation. The folks that are going big into corn are the rice farmers. Corn is replacing rice acres in a big way — even on the Grand Prairie to some degree. Corn is going into areas like Helena, Holly Grove, and Jonesboro to Walnut Ridge to the exclusion of rice. Rice is being left behind. The reason for the rice-to-corn switch is that since both crops requires nitrogen, why not just go with corn?”
Farmers on the Grand Prairie who have switched to corn from rice are also citing water usage as a reason. To produce a corn crop, water usage is about half that of rice.
Any fears of aflatoxin?
“In 1998, we had a couple of hybrids that were at least 60 percent of the corn planted in the state. Those hybrids were racehorses and didn't have very good heat tolerance. They developed a lot of aflatoxin.
“We want varieties that have excellent shuck cover — no cob should be exposed. If we can get that, along with having genetics that can handle heat and are fairly tough, aflatoxin isn't nearly as big a concern.”
Arkansas is expected to plant 400,000 to 450,000 acres of corn — up around 100,000 from last year.
“I think if things keep going, we'll hit 1 million acres of corn in the state. I just hope it keeps climbing steadily instead of happening all at once,” says Johnson.
e-mail: dbennett@primediabusiness.com.
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