Calcium Products - Fertilizer Cost Update
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Fertilizer Cost Update

For many, the cost of fertilizer is the number one topic being discussed. It doesn't take a genius to know it is going to be more expensive in the future.

This article from Wells Fargo drives the point home.

A couple of key points:

In January, the USDA reported that the US exported 193 thousand tons of nitrogen fertilizer. To put this into context, from January of 2002 to December of 2007, the US exported 152 thousand tons. The US exported 27% more in one month than in the previous 6 years.

If the rest of the world wants N at today's price, it's not going to go down.

In the case of hedging future revenues against purchases of fertilizer, the producer only needs to sell as much as the fertilizer represents in their expected cost structure. If their total cost per acre is expected to be approximately $600/acre and fertilizer represents $150/acre of that cost, the producer should sell about 30 bushels per acre to hedge off the fertilizer forward purchase.

Prices of fertilizer will continue to increase. If you listen to Elwynn Taylor there is a 70% chance that the price of grain will be higher in the future due to drought. With the volatility of the markets and cost of inputs make sure you cover your are at least covering your cost.

The exciting times are just starting, what are you doing to offset increased fertilizer prices?

 

 

The Blogronomist is maintained by Craig Dick, head blogronomist and VP of Sales and Marketing. Here you will find a wide array of blog articles from Craig and expert guests on topics related to soil and crop health, farming, and so much more. If it’s not here, ask us!

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  • Article Reference:: Calcium Products, Inc.
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Maintained by Craig Dick, blogronomist and VP of Sales and Marketing, we have a wide array of blog articles from Craig and some expert guests on topics related to soil and crop health, farming and growing tips, and so much more. If it’s not here, ask us!

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