Commodity price changes. The table below shows trends between Nitrogen, Diesel and Wheat prices from 1993-2012.
World economies, power struggles in developing countries and natural disasters have made for very uncertain times. No surprise to anyone, commodity prices are volatile. Inputs, such as, Nitrogen and Diesel continue their upward movement. Unfortunately Wheat prices have fallen off of their high from 2011 to approximately $6.95/bushel. As of April 2012 prices for these three commodities are are Nitrogen at $0.66/unit, Diesel $4.14/gal and Wheat $6.95/bu.
Why are Nitrogen prices continuing to climb with Natural Gas at 10 year lows?
Explanation; corn is projected to be the largest planted acreage since 1937, 95.9 million acres. There is a huge amount of demand on the supply chain right now. There is a bottle neck caused by weather and logistics. The Midwest distributors held off on filling and taking positions throughout the winter because of what they’ve seen happen to them in the past, as well as listening to the drum beat of how the market was going to soften going into spring instead of firming.
There will continue to be many questions and concerns moving into the harvest season of 2012, however, as with any turbulent markets there are opportunities as well. Carefully consider crop rotations, no-till versus conventional planting, bailing straw versus chopping, soil testing, nutrient management, etc. Ask your CPS fieldman about nutrient removal when bailing; it is important to understand the true value of your straw. Develop cost effective strategies to managing nutrient deficiencies with Nature’s Supreme, Lime and Variable Rate applications. Sign up for commodity reports from Tangent CPS website, USDA Grain Reports, Pendleton Grain Growers, etc. Keeping yourself informed will help you find and take advantage of these opportunities.