Discussions

Just went to pick up my bag of fertilizer for my lawn from the local fertilizer plant. Last year I paid $50 per bag and this year it was $35 per bag that’s a 30% drop. The lady at the front desk said the price or fertilizer just dropped. I would assume farmers will get some sort of dropped so their import cost on their fertilizer bill should be less. Let’s see if the price of food drops some.

did you buy your lawn fertilizer?

Unfortunately most of us secured our fertilizer requirements last fall to ensure supply for seeding , I know we did , it’s generally but not always cheaper in the fall. FWIW our fertilizer bill for a small farm was $177000 paid in December for collection this spring, and that’s using soil testing and carefully calculating safe application rates and targeted yields. Many farms will have a vastly higher fertilizer bill than ours. Therefore most producers are now stuck between having paid higher fertilizer and chemical prices and the reality now of dropping grain prices.  
Grain prices have been dropping steadily for a good three months now and don’t really correlate with the cost of our inputs. Most of the increase in grocery prices has been swallowed up by transportation, retailers and processors.  
As JFK put it “ farmers are the only man in our economy that buy everything they buy at retail, sell everything they sell at wholesale and pay the freight both ways”.  
Now we aren’t looking for pity , we’ll work through it as always. Only the public needs the opportunity to understand the roulette that we go through every year and the business risks that we take to produce their food.  
 
Edited by Farmergeorge, 2023-05-01 12:03:39

Yes I understand the fertilizer business, it’s gonna take a while before it shows up in the retail end of it. But any drop is good. I worked for a local trucking company and dispatched fertilizer for 12 years and yes fall application is usually 2/3 done and the 1/3 in the spring. But it will eventually catch up providing it continues to drop . I dispatched NH3 and I don’t miss the rat race. In the fall you would sit and wait till the frost hit then go like crazy.

Not fall applied. All of my fertilizer ( and an increasing amount generally) is banded in spring with the seed drill.  
Plus seed for this spring was purchased and paid last fall to secure spring supply based on higher grain prices.  
As I said the price you pay for groceries in the store has very little correlation to our input prices. Our input cost can be high and our grain price can be low. It’s all affected more by global commodities markets, transportation, retailers and processor’s.

So you’re saying the drop is no good you prefer it to stay up so when you purchase of the next time you pay a higher price or do you like the price to go down that’s all my point was

No a price drop is good. However, most producers won’t be pricing or buying much more fertilizer until late next fall in preparation for the 2024 spring seeding. The cost of producing the 2023 crop has largely already been locked in, the selling price of some of our grain is somewhat locked in by production contracts but a large portion of crop remains unpriced in a falling market due to potential production risks.  
The point is The price that I pay for inputs and even the price that I receive for my product really won’t affect what you pay in the grocery store much. That is affected more by other external factors rather than prices at the farm gate.  
Either way it’s always the consumer and the primary producer that gets sucker punched.  
 
Edited by Farmergeorge, 2023-05-01 14:13:28

Farmers are not in control of the prices they are getting for their products nor what retail is charging their customers for said products.

As much as we would all like to see farmers benefit from higher grocery prices, that is just simply not the case. Whenever prices go up, it is usually to do with what happens in the board room, not in the farmer's field.  
 
From what I am hearing, the reason for the lower input costs right now, is that most farmers aren't buying right now, which makes complete sense.