Menu

2015 Planting Intentions: Fertilizer, Seed, and Pesticide Manufacturers Dodge a Bullet

Fertilizer, seed, and pesticide manufacturers likely took comfort in the acreage numbers contained in USDA’s 2015 Prospective Planting report. Farmers reported intentions to plant 89.2 million acres of corn, 1.4 million less than in 2014, but about 470,000 more than the average trade guess (farmdoc daily March 31, 2015). Farmers reported intentions to plant 84.6 million acres of soybeans in 2015, 834,000 more than in 2014, but nearly 1.3 million less than the trade guess (farmdoc daily March 31, 2015). Overall, projected switches from corn to soybeans indicated in the Prospective Plantings report were less than what many had anticipated.

Input costs are higher for corn than for soybeans. In central Illinois on high-productivity farmland, 2015 fertilizer costs are projected at $148 per acre for corn-after-soybeans compared to $49 per acre for soybeans (2015 Illinois Crop Budgets). Seed costs are projected at $124 per acre for corn compared to $78 per acre for soybeans. Pesticide costs are $66 per acre for corn compared to $40 per acre for soybeans.

Overall, input manufacturers likely prefer to see more corn acres planted than soybean acres because farmer costs are higher for corn. Having more corn acres increases the chances of higher gross revenues for input manufacturers. Higher revenues then can lead to higher returns if margins are roughly the same between corn and soybean inputs. Therefore, the projected relatively small shifts away from corn reduce the possibilities of input manufacturers facing much lower incomes from 2015 sales.

Farmers, however, will face lower 2015 incomes, particularly if corn and soybean prices remain at current levels. If corn prices continue to be below $4.40 into the fall, there will be mounting pressures for farmers to reduce 2016 cash flows through reduced cash rents and reduced fertilizer, seed, and pesticide expenditures. Input manufacturers, however, may not see the need to reduce input prices, as corn acres did not decrease significantly in 2015 while input prices were high. Therefore, not having a significant corn acreage reduction in 2015 may mean less downward pressure on input prices for 2016 production.

Source: Gary Schnitkey, University of Illinois 

Recent News

Robust Soybean Export Forecast, While Countries “Bulk Up” Their Food Supplies
10/19/2020

Mark Ash and Dana Golden explained in this month’s Oil Crops Outlook, from USDA’s Economic Research Service (ERS), that, “Despite an unchanged yield, USDA pegs the 2020/21 U.S. soybean crop down by 45 million bushels this month to 4.268 billion as the sown acreage is revised down by 731,000 acres to 83.1 million. With strong sales to China, USDA raises its forecast of […]

Identifying Fall-emerging Weeds
10/19/2020

2020 Update: I believe marestail will be a problem this fall and require an alternate herbicide as the majority of marestail in eastern Nebraska is resistant to glyphosate and ALS-inhibiting herbicides. Amit Jhala As the 2020 corn and soybean harvest begins to wind down, we would like to encourage growers to take a proactive approach to […]

Cover Crop Considerations When Dealing With Soybean Cyst Nematode
10/15/2020

With the soybeans being harvested a little earlier than usual this year, some producers are finding themselves making management decisions which often include the use of cover crops. There are a lot of agronomic benefits for planting cover crops (Figure 1) such as soil health, soil erosion control, weed reduction, animal feed, and nutrient recycling. […]

Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now