Registrants representing over 40 companies tuned in Feb. 24 to the Green Markets 2010 Agriculture and Fertilizer Outlook audio conference to hear detailed projections about 2010/11 acreage estimates, crop prices, fertilizer supply and demand, and the many factors that continue to influence all three.
The interactive event, the fifth annual spring outlook conference sponsored by Green Markets, allowed registrants to hear, by means of telephone and computer, three industry experts talk about a range of issues, augmented with more than 70 graphs and slides.
Dr. Gerald Bange, chairman of the World Outlook Board for USDA, kicked off the event with a look at the USDA’s most recent acreage estimates for major crops in the 2010/11 timeframe.
Dr. Bange said the USDA is estimating U.S. corn acreage for 2010/11 at 89 million acres, up 2.9 percent from the 2009/10 crop year. Soybeans were projected at 77 million acres, down just slightly from the 2009/10 crop year, while wheat production for 2010/11 was estimated at 53.8 million acres, down a full 9 percent from the previous year. All cotton acres are estimated at 10.5 million acres, up more than 16 percent from the 2009/10 crop year, while rice is projected at 3.2 million acres for 2010/11, nearly 2 percent above the prior year total. Dr. Bange estimated Conservation Reserve Program (CRP) acreage for 2010/11 at 31.4 million, down some 7.1 percent from the prior year, resulting from the expiration of CRP acres in 2009.
Dr. Bange noted the influence of significantly lower fertilizer prices in growers’ planting intentions, with retail prices for ammonia, urea, DAP, and potash down some 14-43 percent from year-ago levels. He also presented in-depth supply/demand figures for corn, soybeans, wheat, and cotton, as well as global production statistics for all four major crops, and detailed capacity figures for the U.S. ethanol and biodiesel industries.
Tom Blue, senior fertilizer industry consultant for Blue, Johnson and Associates, tracked the fertilizer/crop price relationship in the U.S. through recent years, and gave detailed fertilizer demand statistics for all three major nutrients from 2005 through 2010. Blue also talked about the state of fertilizer production in the U.S. and globally, and the relationship between plant cash margins and major consolidations and/or bankruptcies within the U.S. industry dating back to the 1990s.
One of Blue’s graphs detailed the number of NPK production owners in the U.S., Canada, and Mexico from 1960 to the present. He said there were 82 corporate names producing fertilizers in the 1960s, but only 33 of those are still in existence ?Çô and of those, only four are still producing fertilizer.
Jason Moss, of Brock Associates, an agricultural marketing advisory service and publisher of The Brock Report, rounded out the nearly two-hour webinar with a detailed look at the key issues impacting agriculture, including tight credit, a global recession, a deflationary economy, and the influence of index funds. Moss presented his own supply and demand statistics for corn, soybeans, wheat, and cotton, and said farm income will be strong in 2010 because of high profits in corn and soybeans and a strong recovery in livestock. He also predicted that farm consolidations will accelerate.
