|By SUSAN K. DAVIS
LONDON, Ohio — Higher nitrogen (N) costs were a huge concern for farmers attending the grain marketing session at the Farm Science Review on Sept. 20.
Ohio State University Extension grain marketing specialist Matt Roberts led a discussion on the topic during one of the many expert roundtable programs at the annual three-day farm show at the Molly Caren Agricultural Center in London.
When Roberts asked about prices around the state, one producer reported 28 percent N was $190 per ton in western Ohio, and another grower reported prices at $225 per ton in northern Ohio. Anhydrous has reached $600 per ton, and urea is at $350 per ton.
Roberts inquired about farmers switching acreage from corn to soybeans to avoid the higher N prices. A Highland County farmer said he’d grow more hay and grass and raise more cattle. Another producer reported that he’d seed more wheat.
For those who think economists already have pretty boring lives, Roberts joked, these are things they sit around and discuss.
Ohio soybeans strong
The cash soybean market in Ohio is $5.50-$5.60.
“It’s hard to justify the current price based on harvest stand.” Roberts, said.
Instead, the price should be $5.30 to $5.40 taking into account exchange rates.
“This is not a market you should expect for cash,” Roberts said about the soybean supply. “You would expect beans to be around $5.10 given the present supply situation.”
One reason for the strong cash price is exports have been strengthened by the weaker dollar. Brazil will not make target trend yields. Several years ago a 60-million metric ton Brazilian crop was forecast.
“The market is starting to expect lower production in Brazil,” Roberts added.
Asian rust, drought and excessive rain lowered the Brazilian crop.
Ohio corn basis abnormal
Ohio’s basis levels for corn are weak, 35-50 cents under the nearby futures. The basis levels are not typical for Ohio in mid-September.
There’s a lot of corn sitting in river terminals and farmers aren’t marketing old crop, Roberts said. Ample supply is another reason.
“There hasn’t been that much damage to the corn crop,” Roberts said about the drought concerns nationwide.
There will be plenty of corn to supply feed, export and ethanol needs next year, he said.
Published in the September 28, 2005 issue of Farm World.