Northern Ag Network
posted on July 27, 2012 05:04 :: 413 Views
by Marcia Zarley Taylor, DTN Executive Director
HADDONFIELD, N.J. (DTN) -- Attention K-Mart shoppers: Fertilizer budgets are one item where growers can chalk up $100 or more per acre differences compared to their peers. Next to cash rent and machinery costs, this is one of the most glaring differences that affect your breakeven, says AgriSolutions' financial consultant Sam Bachman.
The range of fertilizer budgets for corn farms in the AgriSolutions Inc. database varied far more than for wheat or soybeans and could show individual growers when they're out of line. In 2011, "average" producers spent about $150/acre to fertilize corn acres, but several exceeded $250 and some thrifty operators eked by on as little as $75 over 1,000 acres or more.
Differences among growers may have been compounded by extreme volatility in fertilizer costs for the 2011 crop. Early-bird operators who locked in prices at the lows in August of 2010 would have saved $150/ton on anhydrous, $150/ton on urea, $200/ton on MAP and $200/ton on potash, based on DTN's national retail surveys of more than 300 fertilizer dealers.
"We don't know for sure if some growers bought at the wrong time or are restoring neglected fields, which could up their expenses," says AgriSolutions' financial adviser Sam Bachman. "But the range of what people actually spend reminds us how important it is if you're to stay competitive with your peers."
The data also defuse the myth that big farmers qualify for blue-light specials on input purchases based on bulk buys. "We see a lot of 500-acre farmers paying the same as 15,000-acre producers for fertilizer. So we just don't find the economy of scale you'd expect," Bachman says. "It's hard to argue from our data that there's a huge economy of scale advantage on input purchases."
AgriSolutions counts more than 300 farms in their database from more than a dozen key farm states.
Follow Marcia Taylor on Twitter@MarciaZTaylor
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