Inputs Monitor Editor Davis Michaelsen adds his perspective into the happenings of the inputs markets.
Rhubarb Springs Eternal
Mar 21, 2014
This week marks the official first date of spring and Chip made mention on the radio show yesterday that this time of year, farmers start to get a little tingly -- anxious to get another crop off the ground. Fertilizer applications and even some corn planting is already underway in the deep south. A MarketRally listener tweeted yesterday that he had seen water flowing from tile outlets in Grundy County, Iowa.
That means the thaw is making its way into the northern third of the Midwest and while I do not measure my own harvest in bushels, I took a moment to inspect the garden at home and what I found there was better than the robin's return... rhubarb. Not much, just a couple brave shoots pressing upward through the soil. But enough to confirm that winter's grip is loosening.
The bitterly cold temperatures resulting from the encroachment of the polar vortex will likely delay spring fieldwork in areas with deep snowcover as frost still extends deep into the soil profile. Key to getting the crop off on the right foot will be early root development.
Last year, it was easy to see corn plants whose roots had reached deep enough to capture nitrogen stores that had been drawn deep by thirsty subsoil. The eastern belt is in much better shape on soil moisture than is the western belt, but it was spring rain that gave us trouble last year. With any luck, the cool, damp spring most forecasters predict will allow the soil to warm slowly enough to take advantage of the snowmelt and recharge the deep soil so that any rain that does come along remains available at the top of the soil strata.
On the western belt, early root growth will be especially important because of lingering severe drought. Roots will have a lot of work to do to find water and then transport it back to the plant. The deeper the roots the better start the crop will get.
Thus far, however, P&K demand has been forecast to be very low and more than a few farmers have told me they intend to skip P&K altogether this spring. That was when Dec corn was threatening a $3 handle, before Putin annexed Crimea, spurring grain futures higher. Today the Dec is at $4.80 and most feel the range established over this week may confine futures until the market figures out just what planting intentions are, and what impact the Crimean kerfuffle will have long term on grain prices.
Acreage in Ukraine is expected to be down due to political unrest and a lack of available farm credit. A cut to planted Ukrainian acres in addition to potential export difficulties are making U.S. corn more attractive to importers by the day and as December futures perk up, so do the possibilities for phosphate.
At $4.80, expected new-crop revenue at trendline 160 bu totals $728.00 per acre. Now we are getting somewhere. Depending on land costs and other production expenses, $700.00 is very near an average break even point for most operations.
Strength in December corn futures and the spring tingles will likely be enough to change the minds of some, but consider the yield potential stored in early root development. I have noted before that this is probably not the year to skip P&K because crop prices are not expected to be in any better shape next year. But give this year's crop a chance to 'wow' you and bank that phosphate now. If crop prices are still low, maybe skip applications in the spring of 2015. The last thing you want to do is throw your yield away for fear of a bear market.
With the value of each bushel now more important than ever, make sure to set yourself up for strong yields and efficient uptake by growing deep roots under the crop. Read the full scoop on near-tern P&K prices in this week's P&KToday.
A refreshing breeze, sunshine withering ice jams and a satisfying muck around the edges of puddles all signal the spring thaw is underway. This growing season will test growers with a range of threats to the crop. The best preparation is to lay a strong foundation of roots for plants to stand on. Happy rhubarb to us all!