Registrants who tuned in Feb. 29 to the Green Markets 2012 Agriculture & Fertilizer Outlook webinar heard from three industry experts who offered the latest projections for 2012 crop acreage, crop prices, and fertilizer supply and demand.
The interactive event, presented on the cusp of the busy spring planting season, was the seventh annual spring outlook conference sponsored by Green Markets. Registrants were able to view a wide range of slides and graphs and to hear, via telephone or computer, 90 minutes worth of projections and statistics about the upcoming crop and fertilizer year.
Dr. Gerald Bange, chairman of the World Agricultural Outlook Board for USDA, kicked off the event with a look at the USDA’s most recent acreage estimates for major crops in 2012/13. Bange said world wheat production has outpaced consumption by a considerable margin in three of the last five years, but global corn production has seen the exact reverse. As a result of consumption exceeding production, world corn ending stocks are at the lowest level since 1973/74.
USDA is projecting 94 million acres of corn in the U.S. for 2012/13, Bange reported, with average yields at 164 bushels/acre. The average market price for corn is projected at $5/acre in 2012/13, down some 19.4 percent from 2011/12, and Bange said USDA sees prospects for corn prices falling even further during the year.
While U.S. ethanol exports to Brazil and others surged in 2011, Bange said corn use for ethanol will decline in 2012/13. With the removal of the ethanol blending credit at the end of December, Bange said ethanol production right now shows a negative return.
The U.S. wheat crop is projected at 58 million acres for 2012/13, up 6.6 percent, with an average market price projected at $6.30/bushel. Bange said U.S. soybeans are forecast at 75 million acres for 2012/13, with average yields up slightly to 43.9 bushels/acre. Strong soybean exports will keep the average market price at $11.50/bushel in 2012/13, he said. China remains a major soybean importer, he added, noting that one out of every four rows in a U.S. soybean field is going to China.
U.S. cotton acreage will drop 10.2 percent to 13.2 million acres in 2012/13 due to the “attractiveness of other crops,” Bange said. Average cotton yields are projected at 777 pounds/acre, with the average market price projected at 80 cents/pound in 2012/13.
Richard Brock, president of Brock Associates, warned that we are on the verge of a “big bear market in corn,” noting that “high corn prices have hurt corn usage numbers in every category.” Brock is predicting 94.5 million acres of corn for 2012/13, with average yields at 161 bushels/acre and farm prices forecast in the $4.25-$5.75/bushel range.
Brock also talked of the loss of the blender tax credit for ethanol producers, and said ethanol exports from the U.S. dropped significantly in January and February after reaching a record 172.7 million gallons in December. The average ethanol plant in the U.S. is breaking even at best, he said, and most are losing money. “We’ll see some more closures of ethanol plants in the next two months,” he said.
Brock said higher soybean prices in late February may be enticing some producers away from corn this year. He predicts a 74.5 million acre soybean crop in 2012/13, with average yields at 44 bushels/acre and average farm prices of $9.50-$11.25/bushel.
Tom Blue of Blue, Johnson & Associates detailed U.S. fertilizer demand for nitrogen, phosphates, and potash in each of the last three years, noting an 18 percent increase in consumption in 2010 after the huge drop experienced in 2009. He said consumption was up again by 5-6 percent in 2011, and will likely experience the same increase in 2012. Blue said UAN demand was up 7 percent in 2011, urea up 4 percent,