Crop input prices at a glance
Farmers can likely expect the fluctuations of variable input costs associated with corn and soybeans to cancel each other out during the 2013 growing season.
At a glance, seed prices will have the largest increase followed by nitrogen fertilizer and propane. Allan Miller, a Purdue Extension farm business management expert, expects corn seed to increase by an average of 5% to 7%, and soybean seed is likely to increase even more. Miller estimates seed costs per acre to increase by $8 for corn and $7 for soybeans on average-yield land.
"Fertilizer continues to be the most volatile of the crop input costs, and cost management of this important input might be the difference between being a low-cost or high-cost producer in 2013," says Barry Ward, ag economist at The Ohio State University. Nitrogen fertilizer prices are set to be about 2% to 5% above last year’s prices due to tight supplies and transportation problems. Liquid nitrogen is expected to increase by 28% from last year. Ward says the price of corn will directly affect the price of nitrogen because they are highly correlated.
On the flip side, potash is down about 8% from last January because of abundant North American supplies, Miller says. Those prices are expected to remain stable into the planting season. Phosphate fertilizer prices are down almost 4% from last January, but Miller expects this to increase 1% to 3% as spring planting season approaches and suppliers rebuild inventories. Ward says diammonium phosphate (DAP) and monoammonium phosphate (MAP) have had a 9% price decrease from a year ago. He explains that the potash industry is mostly controlled by two companies: Canpotex (Canadian Potash Exporters) and Bellarussian Potash Company.
Propane prices are forecast at $1.60 per gallon for the fall, up 8% to 10% from last fall.
The U.S. Energy Information Administration forecasts diesel fuel to be down 2% to 3%. Crop insurance premiums are also expected to be down as much as 4% to 5% in 2013 and interest rates to remain flat, Miller says. He expects pesticide prices to be fairly stable.