Transcript Market Forces at Play in Producing the 2012 Crop Alan Miller Craig Dobbins Bruce Erickson Purdue University is an Equal Opportunity/Equal Access institution.

Market Forces at Play in
Producing the 2012 Crop
Alan Miller
Craig Dobbins
Bruce Erickson
Purdue University is an Equal Opportunity/Equal Access institution.
Major Inputs for Crops
•
•
•
•
•
•
Fertilizers
Seeds
Pesticides
Fuel (machinery operation, crop drying)
Machinery
Labor
2
From Roller Coaster to Merry Go
Round, Inputs Costs Rising
3
Farm Prices Paid Indices - Seeds, Fertilizers, Chemicals, and
Fuels
410
1990-92 = 100
360
310
260
210
160
110
60
Year
Seeds
Fertilizers
Chemicals
Fuels
Farm Prices Paid Indices - Machinery Price
and Wage Rate
1990 - 92 = 100
250
200
150
100
Year
Machinery
Wage Rates
Fertilizer Use By Region, 2010
Fertecon
2012 Outlook
6
Potash Corp
2012 Outlook
7
Nitrogen Fertilizer Plant in Trinidad
Courtesy PCS Sales
2012 Outlook
8
11
Phosphorus Mining in Florida
http://www.nytimes.com/2007/08/04/us/04phosphates.html and http://upload.wikimedia.org/wikipedia/commons/e/ef/Togo_phosphates_mining.jpg
2012 Outlook
14
Mining Potassium Deposits in Canada
2012 Outlook
17
Nitrogen/Corn Price Ratios
from Purdue Budgets
Year
2005
N Price
$/lb
.26
Corn Price
$/bu
2.12
Ratio
N price/Corn price
.12
2006
.34
2.31
.15
2007
.28
3.71
.07
2008
.46
5.00
.09
2009
.49
4.00
.12
2010
.30
4.20
.07
2011
2012 Est
.49
.54
5.54
5.90
.09
.09
What is New in Seeds/Genetics
•
•
•
•
New genetics/traits drive pricing
Refuge in a bag
Technology fees are dominating factor
Tough conditions for seed production in
some areas
23
Indiana Seed Price Trends
350
330
310
290
Dollars Per Bu. Of Soybean
or Per 80,000 Kernels of Corn
270
250
230
210
190
170
150
130
110
90
70
50
30
10
Year
Biotech Corn
24
Biotech Soybean
Corn Seed Cost/Gross Revenue
from Purdue Budgets
Seed Corn
Year
Cost
$/A
2005
34
Corn Gross
Revenue
Ratio
$/A
Seed Cost/Revenue
303
.11
2006
35
340
.10
2007
43
581
.07
2008
79
785
.10
2009
89
632
.14
2010
94
668
.14
2011
99
892
.11
2012 Est
118
950
.12
Soybean Seed Cost/Gross Revenue
from Purdue Budgets
Seed Soybean Soybean Gross
Year
Cost
Revenue
$/A
$/A
2005
36
241
Ratio
Cost/Revenue
.15
2006
37
270
.14
2007
39
375
.10
2008
48
608
.08
2009
52
426
.12
2010
52
470
.11
2011
59
643
.09
2012 Est
73
608
.12
Price Trends of Individual Pesticides
(price per gal unless noted)
2007
2008
2009
2010
2011
Glyphosate (Roundup) Herbicide
$29
$40
$43
$23
$17
Sethoxydim (Poast) Herbicide
$74
$73
$83
$81
$83
2,4-D Herbicide
$16
$17
$19
$18
$18
Terbufos (Counter) Insecticide (lb) $2.32
$2.53
$2.46
$2.64
$2.73
Chlorothalonil (Bravo) Insecticide
$48
$60
$50
$41
$47
NASS Agricultural Prices, http://usda.mannlib.cornell.edu/usda/nass/AgriPric//2010s/2011/AgriPric-04-29-2011.pdff
2012 Outlook
27
Sprayer Nozzle and Boom Control
2012 Outlook
28
Planter Clutches
http://www.trucount.com/Photo-Gallery.aspx
2012 Outlook
29
Farm Prices Paid Indices - Machinery Price
and Wage Rate
1990 - 92 = 100
250
200
150
100
Year
Machinery
Wage Rates
31