Posted on Wed, May. 14, 2003
Cost of fertilizing corn doubles in past year
By JOHN SEEWER
Associated Press Writer
TOLEDO, Ohio - Farmers in Ohio and other corn-producing states are worried about making a profit while dealing with fertilizer prices that have nearly doubled at times in the past year.
Some are switching from planting corn to soybeans. Others are planning to use less fertilizer, gambling that those decisions won't lead to disease problems in their fields.
For farmers with cornfields, using anhydrous ammonia or another nitrogen-based fertilizer is often their biggest expense. The price increases this year could mean farmers with 1,000 acres of corn will shell out an extra $10,000.
"We just can't absorb that," said Fred Yoder, president of the St. Louis-based National Corn Growers Association, which represents 32,000 farmers in 48 states.
"We're working on such small margins already," said Yoder, a farmer from Plain City. "This thing could have a $2 billion impact nationwide."
Wholesale prices of anhydrous ammonia jumped from $185 per ton a year ago to $350 per ton in March. It's selling at $320 now, according to Green Markets, a newsletter that tracks the fertilizer industry.
The prices have skyrocketed because of increased prices for natural gas, which is used to make the nitrogen fertilizer. Nitrogen has become a critical component to helping the growth and development of corn crops and increasing yields.
Soybeans, though, require little fertilizer. That's why some farmers are foregoing their crop rotation cycles this spring and planting beans instead of corn.
The number of corn acres expected to be planted this year -- 79 million -- is unchanged from last year, but it's also about 1 million less than originally expected, according to a U.S. Agriculture Department survey. Expected drought conditions, especially in the Great Plains, are contributing to that.
It's not just fertilizer prices that are cutting into the bottom line. Diesel prices are up and irrigation systems in southern states that are powered by natural gas will cost more to operate, Yoder said.
Smaller farmers or those hurt by last summer's drought in the Midwest had less money to lock in the cheaper prices in the fall. Bigger farmers who locked into their fertilizer prices last fall shouldn't be hurt, though.
Mike Clark, who farms 5,200 acres over four counties between Dayton and Cincinnati, said he'll save $40 per ton on liquid nitrogen fertilizer -- a pretty hefty savings considering he'll use up to 900 tons of fertilizer this year.
"It didn't affect me at all," he said. "I think the smaller operators will be affected more by the price increases."
Farmers also can trim costs by altering their use of fertilizers.
Some inject anhydrous ammonia in late fall, after harvest. Others add it in the early spring or after their seeds are planted.
Injecting nitrogen into the ground between the rows of corn in a method called "side dressing" -- when corn is 6 inches high -- uses less nitrogen, cuts expenses and reduces pollution.
Some farmers will stick with corn this year despite the higher planting costs because they expect a bigger return than they could get from soybeans, said Mark Lambert, spokesman for the Illinois Corn Growers Association.
"It's just a judgment call that they look at," he said. "From a business standpoint, corn has been looking more attractive."
It may not be a wise move, though, to do away with crop rotation or cut back on fertilizers just to save money in the short term.
"It'll come back to haunt you at a later time because you'll have disease problems or other trouble," said Mark Schwiebert, who is among a group of farmers in northwest Ohio who have been trying to build an ethanol plant.
"You might save a dime, but it might cost you 25 cents to do it."
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