Fertilizer costs move down
Impacts on Per Acre Fertilizer Costs
Per acre fertilizer costs for corn in central Illinois have been high in recent years. From an average cost of $60 per acre in the early 2000s, fertilizer costs have increased to $200 per acre in 2012 (see Table 1). These cost increases largely follow fertilizer prices, although the 2012 costs were about $30 to $40 higher than those implied by fertilizer prices.
The average fertilizer prices of 2013 point to fertilizer costs in 2013 of $155 per ton. The August 1st prices imply a fertilizer cost per acre of $141 per acre. Further declines are possible. A $700 per ton ammonia price, a $500 per ton DAP price, and a $475 potash price implies per acre fertilizer costs for corn of $126 per ton.
Significant declines in fertilizer costs are possible for the 2014 crop. Fertilizer costs that averaged $200 per acre in 2012 could be in the $125 to $150 range for 2014. Fertilizer cost declines will partially offset projected 2014 revenue declines caused by lower corn and soybean prices. However, net returns for 2014 crop production are projected lower than returns in 2010 through 2012 even given fertilizer price declines.
source: farmdoc daily