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Fertilizer costs may tip the balance in the acreage battle down South

Agriculture.com Staff 01/09/2008 @ 7:58am

World demand for nitrogen, phosphorus and potassium has driven the price of these fertilizers past record levels, and Mississippi producers are trying to make 2008 crop decisions in light of steadily rising costs, according to a university report.

Improved market prices promoted record corn acreage in 2007. Corn acreage in Mississippi went from 340,000 in 2006 to 960,000 in 2007. However, corn generally requires more fertilizer inputs than the other major row crops.

Erick Larson, grain crops agronomist with the Mississippi State University Extension Service, says corn acreage will likely drop because of the amount of fertilizer and fuel needed to plant, manage and harvest the crop.

"Corn's acreage typically slips, compared to other crops grown in Mississippi, when fertilizer and fuel expenses dramatically rise," Larson says.

Corn was attractive in 2007 because prices at planting time were high, and they remain about $1 higher than the state's five-year average price paid for corn. Wheat and soybeans are attractive options in 2008 because growing them requires less nitrogen than it takes to produce corn.

Larry Oldham, Extension soil specialist, said corn uses between 130 and 250 pounds of nitrogen fertilizer per acre, depending on the soil and crop management factors. For comparison, an average of 110 pounds of nitrogen per acre is used on Mississippi cotton.

"Our nitrogen prices have been 55 to 60 cents a pound. That's a historical high," Oldham says. "It takes significantly more nitrogen to produce the corn crop in Mississippi than it does to produce cotton."

In the past, the price of nitrogen fertilizer was closely tied to the price of natural gas used in its manufacture.

"It is part of the overall energy complex, so when energy prices moved up, nitrogen prices went up," Oldham says. "Today its price is driven by the dramatic increase in worldwide demand."

India, China and Brazil historically have been major consumers of fertilizer and recently have increased their demand, contributing to the higher fertilizer prices for all producers.

"Some fertilizer availability may be limited due to transportation and supply issues," Oldham says. "This situation requires good management starting now."

He offers several tips for keeping fertilizer costs as low as possible:

  • Base phosphorous and potassium fertilizer use on recent soil tests;
  • Maintain soil pH to maximize the availability of both applied and native phosphorus and potassium;
  • Manage fertilizers, particularly nitrogen, for the most efficiency.

World demand for nitrogen, phosphorus and potassium has driven the price of these fertilizers past record levels, and Mississippi producers are trying to make 2008 crop decisions in light of steadily rising costs, according to a university report.

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