By ANN HINCH
Assistant Editor

IVESDALE, Ill. — Bringing together a hodgepodge of news and discussion about corn, a recent AgriGold Hybrids Specialty Products Conference sought to inform an audience made up mostly of representatives from food processing industries, of the challenges with which growers are grappling.

“When you think about it, things have changed dramatically just in the last 12 months,” said AgriGold General Manager John Kermicle, “with commodities we’re dealing with, and the price of inputs.”
He added that agriculture needs product leadership, especially for growers to manage their hybrids – in sales, marketing and product development. To that end, AgriGold has launched its 2008 Corn 360 campaign, aimed at helping farmers choose the best seed varieties.

Kermicle said the USDA is projecting more than 110 million acres of corn to be planted in 2012; Dr. Gary Schultz, corporate product manager for parent company AgReliant Genetics, said market speculation is for anything between 92 million-98 million acres next year alone.

That nations in Asia are demanding more grain and grain-fed meat – and are able to pay for it, thanks to their own prosperity and the low value of the American dollar – is not news. AgriGold Agronomy Manager Mike Kavanaugh said growth for China alone is 11 percent per year, and 9 percent in India. People want a better standard of living, including better nutrition.

“They’re wanting to live like we do,” he said, adding U.S. agricultural output “far exceeds” yields in other countries and makes us a good supplier.

This may be welcome news for growers at current market prices – and for seed companies – but AgriGold also recognizes all that additional corn will cost more to plant, especially with rising prices for fertilizer, seed and land rents. Fertilizer, especially, is on the rise, both in usage and cost – Kavanaugh said in the past few years, phosphate use has increased 4.1 percent, and 95 percent of fertilizer’s sales growth is coming from developing countries.
DAP prices keep going up, too, as do those of nitrogen and potash – the United States used 4.5 million tons of the latter in 2005, according to Kavanaugh. But as much as we’re using, he said China is using more and is prepared to outbid for it.

“We’re paying more for an acre of seed than we’ve ever paid in the past, and that’s going to continue to rise,” Schultz said.

Kavanaugh projected some costs for the near future. Next spring, he said potential prices could be $1,300 per ton for ammonia and DAP, $1,000 for potash, $950 for urea and $500 for 28-percent.
“We were talking in the $140, $150, $160 range for potash, just over $200 a ton for anhydrous,” he said of 2002. “Look at how this thing is shaping up here for 2009.”

To put it in perspective, he said six years ago a farmer could spend $52 an acre to fertilize 180-bushel corn with ammonia, DAP and potash; just four years later, the same effort cost $96. By next spring, the cost is expected to rocket to $280 an acre.

The good news, Kavanaugh added, is with improved yields and commodities prices it should only take five more bushels/acre to pay these costs in 2009 than in 2006. (His figures showed in 2006, a farmer had to sell 42 bushels of corn per acre at the then-market price of $2.28 to meet their fertilizer costs; in 2009, he figures 47 bushels at $6 will suffice.)

“How are growers responding to this? What’s going on out there as they think about fertilizer?” Kavanaugh posited, adding that to beat projected shortages, growers are forced to buy fertilizer long before delivery. Some have even bought for 2009 already.

“They’re getting a heck of a good buy right now,” he said. “providing the prices don’t go down.”

Changes in fertilizer usage also affect other fiscal decisions. Kavanaugh said growers who are using more manure as a supplemental N-P-K source are buying it increasingly from local livestock operations – and the spreader equipment to apply it. They’re also turning more to GPS equipment to map their fields so they know where to apply and where the soil is richer.

Hybrid management is also important, which is where a seed dealer can help. Different hybrids will uptake nitrogen at different growing points, and if a grower can keep track of those, they will know when to apply it for maximum absorption.