By Larry W. Dallas
Douglas County agriculture has slowed in January. It didn’t seem like that much grain moved after the first of the year. We hauled some corn when it was frozen and had soybeans to go to town as well. There are lots of semis on Rt 36 going to Decatur. Those processors need corn and soybeans year-round.
The farm press is full of stories about high fertilizer prices. Nitrogen fertilizer has tripled in price from a year ago. Phosphorus and potassium will cost twice as much. Fall 2022 corn is about 25 percent more than a year ago, not enough to cover the fertilizer increase. Any group of farmers immediately begins to discuss the price of fertilizer and what might be done in the face of sky-high input prices.
I was on an Illinois Farm Bureau-sponsored conference call with two major fertilizer companies the first week of January. One is mainly a producer of nitrogen fertilizer and the other mostly phosphorus and potassium fertilizers. They were not optimistic prices would go down anytime soon. There is never one reason for something like the price increase we have seen. These companies blame shipping costs and world demand among other things.
An interesting take was from the producer of nitrogen fertilizer. They said that Europe had a dry, windless summer. Their windmills made no electricity and dry rivers didn’t have enough flow to generate any either. Instead, generation plants using natural gas became the main source of electricity, and natural gas prices shot up. Natural gas is also the raw material for nitrogen fertilizer. The nitrogen fertilizer producers shut down, unable to make any money.
The American Farm Bureau Federation held its annual meeting early in the month. Delegates from the 50 states and Puerto Rico gathered in Atlanta, Georgia. The format is like that of the Illinois Farm Bureau. The states submit resolutions to change AFBF policy and debate those changes. Illinois chose a dozen pieces of our policy to add to the AFBF policy book and got all but one of those through the delegates.
There are of course stark differences in opinions among the delegates. Heavily debated were policies dealing with price discovery in the cattle market. The big cattle feeding states in the west sell most of their cattle via contracts with the packers. The Upper Midwest and eastern states don’t have the numbers of animals to attract the big packers and suffer from much lower prices. AFBF policy was not changed and heavily favors the big cattle feeders.
An Illinois policy advocating a crop insurance credit for planting cover crops failed to pass. Illinois has a state program and other funding for planting cover crops, which can be quite expensive. This money goes quickly and is generally available only to first-time adaptors of cover crops. We thought an insurance credit was a way to compensate everyone for doing something for soil health. Not enough of the rest of the country felt the same way.
I talked to a Montana farmer that grew wheat and dry peas and laid a third of his ground out each year to allow moisture to accumulate for a crop the following year. His total rainfall is 12 inches per year. That is just a little more than the 10 inches we were ahead of average at my house in Illinois this year. One of the Georgia delegates seated behind the Illinois people raises pecans and pine trees for lumber. It seemed like there were dairy farmers from every state in the union. Dairy policy problems make growing corn and soybeans look easy. American agriculture is diverse and productive.
One thing we have done earlier than usual is figuring out our herbicide programs for spring. Like fertilizer, many of the most used herbicides will be more expensive. They may also be hard to get. We would like to get at least some of the scarcer products that are very effective. If we can’t get as much of a product as we would like, we need to formulate an alternate plan that will give us similar weed control. It is much easier to have this planned out ahead of time rather than doing it on the fly during planting.
Like so many things, many of our herbicides are coming from China. Ocean freight rates have risen by a factor of seven in the last year and ships cannot be unloaded because of backups at west coast harbors. In some cases when ships are unloaded, they turn immediately for Asia, not waiting for a return load. Labor shortages from covid get some blame. It all means higher prices and product shortages for us.
Cash grain prices have remained at good levels. South America is experiencing weather problems again this year and that is keeping prices up. Soybean harvest has started in the southern hemisphere and yields are good but the first crop corn in Argentina is in very poor condition because of drought conditions. It may be dry enough to affect planting their second crops too. That uncertainty keeps grain prices up.
This hemisphere is a couple months from planting our next crop, but large areas of the US are still in drought conditions. We have plenty of time to make up the deficit. Rain can’t soak into the frozen ground, however. The dry parts of the upper Midwest are frozen. The grain markets will continue to factor all these uncertainties into prices.
Besides hauling grain, we have been working on equipment in the shop. There are winter parts sales at the implement dealers, and we put together a list of things that we know we will need for the coming year. There are things we don’t fix until we can get the repairs at a reduced cost. These are things that won’t be needed until the next season or might be more cosmetic in nature. It is probably not a big money saver, but it is satisfying.
The flurry of meetings that occurs most winters is muted by covid still. A meeting of Illinois drainage districts is going on as I type this, however, after missing last year. I need to update my herbicide applicator license sometime this winter. That training can be done online. We went to a farm sale hoping to pick up another grain truck reasonably. A lot of other farmers had that in mind too and we did not bring it home.
Thank you for reading about January in Douglas County agriculture.