Purdue University Cooperative Extension Service is an equal access/equal opportunity institution. August 16, 2013 Alan Miller Farm Business Management Specialist Outlook for 2014 Crop: Ag Input Prices

Purdue University Cooperative Extension Service is an equal access/equal opportunity institution. Fertilizers Will fertilizer prices bottom during 2013 fall fill or continue downward into the spring? How will a late harvest this fall affect fertilizer markets?

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Fertilizer Price Declines This Fall Type of Fertilizer Spring 2013 NASS Survey Prices, North Central Region in $/ton Illinois Production Cost Report on August 1, 2013 in $/tonPercent Decline Anhydrous Ammonia % Urea % 28% % Phosphate (DAP) % Potash %

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U.S. the Low Cost Ammonia Producer

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Price Outlook for Nitrogen Fertilizers Prices may to drop another 5% or more depending on the product – Growing domestic & global capacity (Chinese urea) – Cheap natural gas in US – Supply interruptions in Trinidad – Planting intentions for 2014 crop – Financial position of crop farmers – Growth in US market is in UAN and urea – Go slow on forward pricing 2014 nitrogen needs

Purdue University Cooperative Extension Service is an equal access/equal opportunity institution. US Production of Phosphate Fertilizer Outpaces Sales and Exports

Purdue University Cooperative Extension Service is an equal access/equal opportunity institution. Price Outlook for Phosphate Fertilizer Phosphate – large inventories will continue to exert downward pressure on prices – Declines of 3-5% from current levels possible – Spring planting season in the US was not ideal for P & K application – Relatively high prices reduce demand Late US harvest may also negatively affect the fall application season

Purdue University Cooperative Extension Service is an equal access/equal opportunity institution. North American Potash Cartel Reduces Production to Reduce Supply Glut

Purdue University Cooperative Extension Service is an equal access/equal opportunity institution. Price Outlook for Potash Fertilizers Cartel breakup destabilizes industry – Beloruskali & Uralkali will now compete for market share; their joint marketing venture (BPC) ended by Uralkali in July – 24% increase in production planned by Uralkali Indicative of the production capacity curtailed by members of the two potash cartels: Canpotex and BPC Large drop in world market prices expected – US court hands down favorable antitrust ruling against members of the two potash cartels – Prices likely to decline 5-10% this fall and may decline even further into next spring

Purdue University Cooperative Extension Service is an equal access/equal opportunity institution. Seed Price Situation What a difference a year makes! – Good seed production conditions in Midwest A little too cool at times – Quantity and quality look good at this point Soybeans – pod set very high Corn – crop is much better than last year but two weeks later Corn - early frost is a concern

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Outlook for 2014 Seed Prices Corn, beans and wheat seed prices will be up 2-6% overall Factors favoring higher prices R & D costs to recover Two previous years were poor-production, high- production-cost years Corn and bean farmers are perceived to be strong financially with plenty of liquidity Expect mixed bag in product pricing as dealers are sensitive to declining commodity prices and crop economics in transition Expect bigger increases for newer products

Purdue University Cooperative Extension Service is an equal access/equal opportunity institution. Crop Chemicals Situation Growing sales have lead to higher prices for chemicals as a group Perception that the role for chemicals in crop protection may be increasing How will lower commodity prices affect farmer spending for crop protection products? – Industry expecting large planted acreage

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Outlook for Crop Chemical Prices Expect fungicide and insecticide prices to increase 2-4% Expect herbicide prices to remain flat

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Texas Spot Prices for Propane

Purdue University Cooperative Extension Service is an equal access/equal opportunity institution Fuel Price Forecast USEIA forecasts – 4% lower crude oil and diesel prices in 2014 – 10% higher natural gas prices in 2014 Propane futures are generally down moderately for 2014 – Local prices currently around $1.45/gallon Factors keeping prices relatively stable – High level of domestic energy production – No big shocks to the energy system lately – Slowly growing US and global economies

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