Mid-April 2012

Rising costs for corn production may

encourage shift to soybeans BY HEATHER HETTERICK, OHIO AG NET Talk about sticker shock. When

farmers go to buy fertilizer they may be taken aback by the price of urea that has jumped upward of $200 per ton since February. “You have farmers that were very

slow to commit to their needs for the upcoming season,” said Phil Altstaetter, Crop Nutrient Manager for Trupointe. Two or three years ago, people

owned fertilizer positions and farmers said we aren’t going to buy. People like Altstaetter held those positions as they devalued tremendously in 2008 and 2009 and then they took smaller posi- tions than traditionally. Now, when farmers are ready to buy, there are fewer tons available. Altstaetter also said that the values

were too low over the winter. That sent nitrogen to markets outside the United States. Then in February, concern over having enough nitrogen for all the corn acres forecasted drove bids higher to get imports to the United States. This doesn’t mean there’s a shortage. “Farmers will pay a premium to get

the product in place as timely as they want it,” Altstaetter said. “It’s just a mat- ter of how far will we have to haul it and there could be a longer than normal wait time until the product is in place.” The early spring magnifies the problem. “It’s throwing gas on the fire,”

Altstaetter said. Urea is the most expensive form of

nitrogen today. So the first thing that could happen is growers switch to ammonia or 28% UAN. “I expect UAN to react and move up

as the urea market has and it’s starting to happen now,” Altstaetter said. He said farmers need to watch how

much corn the United States plans to plant this year, because it’s going to demand a lot of nitrogen. At the end of the growing season last year the system was empty of nitrogen. “Now we want to plant a huge corn

crop and we are starting with empty tanks and bins,” Altstaetter said. So when can we expect the price to

come down? “June,” Altstaetter said. “Basically it

will be too late for this growing season for most Ohio farmers.” Altstaetter believes that if nitrogen

prices get too high, Ohio farmers may easily switch to soybeans, a move that is already being considered by some. Barry Ward, production business management leader for OSU Extension, agrees that Ohio could see a shift to soybean acres based on a number of factors, including input costs and the markets. “Farmers usually look at those signals

as they fine-tune plans for planting,” Ward said. “They have the ability to make changes as long as they haven’t done any kind of field activity, like applying anhydrous ammonia or pre- emergent herbicides, that would prohibit them from switching. And, every year we have different weather considerations — last year, some farmers switched from corn to soybeans because of all that rain- fall and the lateness of planting.” This year, corn prices remained strong

through March despite the fluctuations since fall, but recently soybean prices have strengthened in comparison, Ward said. “The marketplace is sending signals

that we might try to find more bean acres,” he said. “Soybeans still aren’t showing a better profit per acre, but the improved soybean prices are a consider- ation to keep in mind.” Of course, rotating crops decreases

insect and disease pressure, and the nitrogen-fixing ability of soybeans allows farmers to reduce costs and applications of fertilizer on corn the following year. But in the last few years, more farmers have weighed the benefits of crop rota- tion against the outlook of strong corn prices and have made the decision to plant corn after corn, Ward said. Yet basing decisions on market trends

can be precarious. “Trying to outguess the market is

sometimes iffy,” he said. “It’s a guessing game, and some farmers look at the pos- sibilities and decide just to stay with their normal rotations. This is a decision every farmer needs to make based on their own enterprise budgets and their own situation.”

Inspect now. Inspect now.

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JD EQUIPMENT, INC. 1660 US ROUTE 42 N LONDON, OH 43140 (614) 879-6620

JD EQUIPMENT, INC. 1660 US ROUTE 42 N LONDON, OH 43140

JD EQUIPMENT, INC. (614) 879-6620

JD EQUIPMENT, INC.

219 COLUMBUS-SANDUSKY ROAD N MARION, OH 43302 (740) 389-5458

219 COLUMBUS-SANDUSKY ROAD N MARION, OH 43302 (740) 389-5458

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 4085  

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 4085Westerville Road 

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 Columbus, Ohio 43224  (740) 389-5458 

       

 4079 Lyman Drive Hilliard, Ohio 43026 (614) 527-8800

Hilliard Lancaster Lancaster

JD EQUIPMENT, INC. 1660 US ROUTE 42 N LONDON, OH 43140 (614) 879-6620

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219 COLUMBUS-SANDUSKY ROAD N MARION, OH 43302

London (740) 389-54581660 US 42 NE

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    A0D01DDCU2H51313 Ohio’s Country Journal • ocj.com • Mid-April 2012 17  

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Washington Court House 1662 US Rt 62 SW

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Washington Court House, Ohio 43160 (740) 335-2071

Wilmington

Wilmington 7550 US 68 N

JD EQUIPMENT, INC. 4079 LYMAN DRIVE HILLIARD, OH 43026 (614) 475-0707

JD EQUIPMENT, INC. Zanesville

4085 WESTERVILLE RD COLUMBUS, OH 43224 (614) 475-0707

Zanesville (740) 450-7446

           

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JohnDeere.com/AgService

Wilmington, Ohio 45177 (937) 486-5211

JD EQUIPMENT, INC. 4394 NORTHPOINTE DRIVE ZANESVILLE, OH 43701 (740) 450-7446

JD EQUIPMENT, INC. 7550 US 68 N

4394 Northpointe Drive (937) 486-5605 Zanesville, Ohio 43701

WILMINGTON, OH 45177    

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 219 Columbus- Sandusky Road N 

Marion 

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JD EQUIPMENT, INC. 4079 LYMAN DRIVE HILLIARD, OH 43026 (614) 475-0707

Inspect now. Easton

JD EQUIPMENT, INC. 4079 LYMAN DRIVE HILLIARD, OH 43026 (614) 475-0707

“Serving You for the Futur Marion

JD EQUIPMENT, INC. 4085 WESTERVILLE RD COLUMBUS, OH 43224 (614) 475-0707

JD EQUIPMENT, INC. 4085 WESTERVILLE RD COLUMBUS, OH 43224 (614) 475-0707

WILMINGTON, OH 45177 (937) 486-5605

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JohnDeere.com/AgSer erviic

JohnDeere.com/AgSer JD EQUIPMENT, INC.

JD EQUIPMENT, INC. 7550 US 68 N

JD EQUIPMENT, INC. 7550 US 68 N

erviic ce ce

4394 NORTHPOINTE DRIVE ZANESVILLE, OH 43701 (740) 450-7446

4394 NORTHPOINTE DRIVE ZANESVILLE, OH 43701 (740) 450-7446

4394 NORTHPOINTE DRIVE JD EQUIPMENT, INC.

4394 NORTHPOINTE DRIVE

WILMINGTON, OH 45177 (937) 486-5605

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