DENVER, CO – What is the one factor that may cause a shift in cropping decisions across the United States in 2022? According to CoBank’s Knowledge Exchange Division, it could be fertilizer prices.
In a new report, CoBank explains why prices for nitrogen-based fertilizers have skyrocketed to historical highs and why prices may remain in an over-priced orbit throughout a good portion of the new year.
CoBank is one of the largest private credit providers to the rural economy and delivers loans, leases, and other financial services to agribusiness, rural infrastructure, and Farm Credit customers in all 50 states.
Fertilizer price increases are driven by nitrogen production challenges, tight global supplies, rising natural gas costs, and steady demand.
The group also believes that soybean acres will gradually increase in the U.S., driven by the demand for renewable diesel, but will not overtake corn acres in the upcoming growing season.
“The sharp rise in fertilizer prices has fueled speculation about a major acreage shift away from corn,” said Kenneth Scott Zuckerberg, lead grain and farm supply economist with CoBank. “We don’t see that happening in 2022. The current price ratio of soybeans to corn shows that soybean prices remain weak compared to corn. And demand for corn among U.S. ethanol producers is expected to remain strong given the current high fuel prices and record blending margins.”
Grain farmers and farm input suppliers are anxious heading into 2022 due to the higher prices for fuel, shortages of agrochemicals, and, most importantly, the parabolic rise in fertilizer prices, which have increased 265 percent since May 2020.
(SOURCE: All Ag News)
