|
 Producers
are going to face the reality of high demand for inputs and lower
supply which of course means higher prices across the board. At the
same time, the recent years harvest reports indicate that our
Central Illinois producers are maximizing yield potential and seeing
average corn yields above 225 bushels to the acre. Higher yields of
course mean more crop on the market, or supply that is higher than
demand. When supply exceeds demand, then grain prices will fall.
Click on table for enlarged
view
According to an article published in August 2022 in FarmDoc Daily -
"2023 Crop Budgets: Higher Costs and Lower Returns." “Costs are
projected to increase in 2023 from 2022 levels. At projected cost
levels, per bushel prices of $5.30 for corn and $12.75 for soybeans
result in marginal profitability, similar to levels experienced from
2014 to 2019. While 2023 is projected to be profitable, risks exist.
A decline in commodity price likely would not be associated with
similar decreases in cost levels, reducing already narrow margins.
In 2023, farmer returns are projected at $25 per acre, well below
levels for 2020 to 2022, when farmer returns averaged $232 per acre.
While commodity prices are projected lower, those prices still are
not low by historical standards. A projected $5.30 corn price for
2023 compares to a $3.66 price from 2014 to 2019. Similarly, a
projected soybean price of $12.70 compares to an average price of
$9.69 from 2014 to 2019.”
Increasing profitability is not going to be as large a goal as
simply trying to maintain profitability. With the fluctuating prices
of all inputs, farmers this year will be looking to save money more
than make money.
Gary Schnitkey had commented
in a University of Illinoi article, “In November 2021, farmers could
buy anhydrous ammonia, potash, and diammonium phosphate (DAP) for
roughly $800, $600, and $717 per ton, respectively. Farmers who
locked in those prices also locked in certainty.
“Currently, those prices hover around $1,400, $983, and $862 per
ton, respectively. Because of global uncertainty and healthy demand
spurred by high cash corn prices, fertilizer prices are expected to
stay at these levels.”
However, that may not entirely be the case. On Sunday, March 5th the
Market to Market report televised on PBS noted that fertilizer
prices have been dropping and it is speculated that those prices
will continue to float downward throughout 2023. This is good news
for those who did not contract fertilizer in November and December,
and a bit of pinch to those who did.
Even so, the prices have a long way to go before they drop down to
those pre-pandemic levels and careful application will still help
curb the pain when the bill comes.
In an article published in
Successful Farming in November, “11 Ways to make money with 2023
fertilizer” experts in the field recommended that farmers choose to
feeding the crop over feeding the field.
Broadcasting fertilizer to build up nutrient levels in the entire
field was once a common practice and not a bad idea as overall soil
health begins with soil nutrients levels. But there is also that
point of diminished returns to think about. If soil is healthy, then
the best practice will be to fertilize for the crop.
The first step to making money this year according to the article
may be to invest money in proper soil testing. If soils are within
an acceptable range for overall nutrients, then don’t spend money on
what you already have. Instead look at crop feeding versus broadcast
feeding.
Dan Quinn, a Purdue University Extension agronomist suggests in the
article that 2023 may be the year to utilize starter fertilizers. He
notes that in many cases, this is a practice that is not used to its
fullest and some farmers may not ‘be in the habit” of applying
fertilizer when planting corn, but, he says, “2023 could be the year
it pays big.”
Quinn said that research indicates that corn yield increased an
average of 5.2% when using starter fertilizer blends including N, P,
and K.
Quinn spoke of a 2x2 application (2 inches deep, 2 inches to the
side of the row) and a 21-21-15 rate was effective in adding to the
bushels per acre at a cost savings.
Beck’s Seed Company research suggested that the traditional 2x2
practice could be taken one step further to a Triple-2 (2 inches
deep and two inches on each side) with the potential to increase
yields by five bushel per acre versus the 2x2 method.
The article quoted Beck’s research., “Through its Practical Farm
Research Program, Beck’s tested two fertilizer products:
50/50 blend of 28% and 10-34-0
Straight N
Through several years of research, the yield bump appears to come
from the N instead of the P.
Beck’s believes in the system
so much it has earned the “PFR Proven” label, meaning it has shown a
return above investment for three consecutive years.
In addition to applying fertilizers with the specific target of
feeding the plant, a second article found in Successful Farming
recommends that the plants we feed not be weeds.
[to top of second column]
 |
Pre-Emergent herbicides will
pay off this year in the corn field according to the article as it
will reduce the amount of nitrogen consumed by a detrimental crop.
Why a pre-emergent herbicide is a good investment” notes that weeds
can consume as much as 13.5 pounds of nitrogen as well considerable
amounts of P and K.
Shawn Hock U.S. Corn Herbicide Product Lead for Syngenta said, “We
did a study to see how much nitrogen weeds consume across 20
locations,” he says. “We found that 2- to 4-inch weeds consume about
13.5 pounds of nitrogen, as well as around 0.85 pounds of
phosphorous and about 16.8 pounds of potassium. To put that in
perspective, you could produce over 16 bushels of corn with the
amount of nitrogen being taken by those weeds.”
“If you look at it from the
perspective of how much those fertilizers are worth, Hock says
you’re losing about $24 per acre in nutrients when 2 to 4-inch weeds
are present. ‘Investing that money in a strong, pre-emergent
residual herbicide would pay dividends,’ he says, adding that not
many producers across the Corn Belt are making this application.”
“Weeds have undoubtedly increased in prevalence. In the market
research we did last year, 40% of corn growers said they were having
difficulty controlling weeds like waterhemp and Palmer amaranth,” he
says.
Another compelling thought for how to make more money on the farm in
2023 was introduced by Market-to-Market analyst Elaine Kub. She
noted that while pork prices are hovering steady there is an incline
in beef prices. She said at the last close, 550-pound calves were
selling at $260/CWT. Fed cattle is going for $150 to 172/CWT. While
feeder cattle may not be an option for all, it could be an option
for those who are already set up for that style of market.
According to another Successful Farming publication “5 Reasons to be
Bullish on Cattle” now is the time to expand that heifer herd and
raise more feeder calves for a market that is growing, much in
thanks to the coronavirus.
Market analyst Don Close with
Terrainag.com was quoted in the article saying there is a decline in
cow numbers while the demand is stronger than pre-covid. The reason?
“What they (consumers) realized is that they could get a prime
restaurant meal at home,” Close says. “And they like it.” The report
goes on to say that beef consumption in 2022 was the highest it has
been in 12 years, at an average of 58 pounds per person.
While Illinois is not considered to be one of the top cattle
producing states in the union, it could rank higher than it does
under the right circumstances. With farms thinning their herd as
producers age and look to retire, the shortage potential is there.
With Illinois being a prime location for corn production, grain fed
cattle could easily become an alternative to selling the crop.
And finally, there was a blog post that came to the foreground in
this time of high inputs and less than stellar income potentials.
The blog encouraged readers to take from the previous generations
the lessons learned in the days of the great depression. Lesson one
was, do I really have to have this? Do I want it because it is nice
and new or do I really need it?
In a recent survey of Illinois farmers, 43% illustrated this saying
that the plan for 2023 was to keep the farm machinery they are now
using for at least another year.
But, for some, there is a
need, and the one final thought on how to be profitable in 2023 is
to talk to your neighbors. If Farmer Joe has a better tractor and
Farmer Bob has a newer combine, can the two figure out a way to work
together and share their equipment. For small to mid-sized farmers,
the prospects of a $750,000 combine and header set-up is really the
impossible dream in a tough year particularly. According to LDN’s Ag
consultant John Fulton, equipment sharing is a very real practice
that is working well for farmers in central Illinois, as many are
finding it to be the best way to advance with technology without
breaking the bank.
So, in the end, will producers make money this year? Possibly. The
challenge will be to be effective, efficient, and optimistic.
Sources
Schnitkey, G., K. Swanson, C. Zulauf and J. Baltz. "2023
Crop Budgets: Higher Costs and Lower Returns." farmdoc
daily (12):113, Department
of Agricultural and Consumer Economics, University of Illinois at
Urbana-Champaign, August 2, 2022.
https://farmdocdaily.illinois.edu/2022/08/2023-
crop-budgets-higher-costs-and-lower-
returns.html
Successful Farming
11 ways to make money with 2023 fertilizer
These include soil testing, properly handling soil samples, and
protecting nitrogen with stabilizers.
By Bill Spiegel
11/24/2022
https://www.agriculture.com/crops/fertilizers/11-
ways-to-make-money-with-2023-fertilizer
Successful Farming
Why a pre-emergent herbicide is a good investment
By Laurie Bedord
11/08/2022
https://www.agriculture.com/crops/fertilizers/
strengthening-your-weed-control-can-help-
save-your-fertilizer-investment
|
