purdue university cooperative extension service is an equal access/equal opportunity institution....
TRANSCRIPT
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
August 16, 2013
Alan MillerFarm Business Management Specialist
Outlook for 2014 Crop: Ag Input Prices
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Fertilizers• Will fertilizer prices bottom during 2013 fall
fill or continue downward into the spring? • How will a late harvest this fall affect
fertilizer markets?
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
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Fertilizer Prices
Nitrogen (Ammonia) Phosphate (DAP) Potash
North Central Region, Agricultural Prices, April Report2014F = Illinois Production Cost Report average on Aug. 15, 2013
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Fertilizer Price Declines This Fall
Type of Fertilizer
Spring 2013 NASS
Survey Prices, North Central
Region in $/ton
Illinois Production Cost
Report on August 1, 2013
in $/ton Percent DeclineAnhydrous Ammonia 877 695 -21%Urea 574 470 -18%28% 395 321 -19%Phosphate (DAP) 634 535 -16%Potash 581 502 -14%
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
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Nitrogen Prices
Anhydrous Ammonia Urea UAN (28%)
North Central Region, Agricultural Prices, April Report2014F = Illinois Production Cost Report average on Aug. 15, 2013
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
U.S. the Low Cost Ammonia Producer
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Price Outlook for Nitrogen Fertilizers • Prices may to drop another 5% or more
depending on the product– Growing domestic & global capacity (Chinese urea)– Cheap natural gas in US – Supply interruptions in Trinidad – Planting intentions for 2014 crop– Financial position of crop farmers– Growth in US market is in UAN and urea– Go slow on forward pricing 2014 nitrogen needs
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
US Production of Phosphate Fertilizer Outpaces Sales and Exports
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Price Outlook for Phosphate Fertilizer• Phosphate – large inventories will continue
to exert downward pressure on prices– Declines of 3-5% from current levels possible– Spring planting season in the US was not ideal
for P & K application– Relatively high prices reduce demand
• Late US harvest may also negatively affect the fall application season
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
North American Potash Cartel Reduces Production to Reduce Supply Glut
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Price Outlook for Potash Fertilizers• Cartel breakup destabilizes industry
– Beloruskali & Uralkali will now compete for market share; their joint marketing venture (BPC) ended by Uralkali in July
– 24% increase in production planned by Uralkali• Indicative of the production capacity curtailed by
members of the two potash cartels: Canpotex and BPC• Large drop in world market prices expected
– US court hands down favorable antitrust ruling against members of the two potash cartels
– Prices likely to decline 5-10% this fall and may decline even further into next spring
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Seed Price Situation• What a difference a year makes!
– Good seed production conditions in Midwest• A little too cool at times
– Quantity and quality look good at this point• Soybeans – pod set very high• Corn – crop is much better than last year but two
weeks later• Corn - early frost is a concern
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
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Corn Seed Prices
Biotech Corn Linear (Biotech Corn)
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
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Soybean Seed Prices
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Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
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Adoption of Genetically Engineered (GE) Corn and Soybean Seed in Indiana
GE Corn Varieties GE Soybean Varieties
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
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Adoption of Genetically Engineered (GE) Corn Seed in Indiana
Bt Only Herbicide Tolerant Only Stacked Varieties
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Outlook for 2014 Seed Prices• Corn, beans and wheat seed prices will be
up 2-6% overall• Factors favoring higher prices
• R & D costs to recover• Two previous years were poor-production, high-
production-cost years • Corn and bean farmers are perceived to be strong
financially with plenty of liquidity• Expect mixed bag in product pricing as dealers are
sensitive to declining commodity prices and crop economics in transition • Expect bigger increases for newer products
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Crop Chemicals Situation• Growing sales have lead to higher prices for
chemicals as a group• Perception that the role for chemicals in
crop protection may be increasing• How will lower commodity prices affect
farmer spending for crop protection products?– Industry expecting large planted acreage
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
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Prices Paid Indices for Farm Chemicals
Herbicides Insecticides Fungicides
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Outlook for Crop Chemical Prices• Expect fungicide and insecticide prices to
increase 2-4%• Expect herbicide prices to remain flat
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
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Indiana Fuel Prices
Diesel (bulk) L.P. Gas
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
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Midwest No 2 Diesel Retail Prices (Dollars per Gallon)
Midwest No 2 Diesel Retail Prices (Dollars per Gallon)
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Texas Spot Prices for Propane
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
2014 Fuel Price Forecast• USEIA forecasts
– 4% lower crude oil and diesel prices in 2014– 10% higher natural gas prices in 2014
• Propane futures are generally down moderately for 2014 – Local prices currently around $1.45/gallon
• Factors keeping prices relatively stable – High level of domestic energy production– No big shocks to the energy system lately– Slowly growing US and global economies
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
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Prices Paid Indices: Machinery & Wages
Farm Machinery Farm Wage Rates
2002-2012 average annual rate of increase:machinery = 7.4%; wage rates = 3.0%
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
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Sales of Large 2WD Tractors (100+ HP),4WD Tractors, and S.P. Combines
4WD Tractor S.P. Combine 2WD Tractor 100+ HP
% increase year over year,YTD unit sales - June 2013 100+ HP 2WD +27.4%4WD +13.4%S.P. Combines +46.7%
Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.
Questions, Comments