Agronomist Notes
I just finished talking to the local fertilizer dealer and choked after I asked him for current prices. Prices are now $555 a tonne for urea, $594 a tonne for phosphate, $357 for potash and $385 for sulphur. Those who were proactive and booked fertilizer in September have saved $100 a tonne or $9.00 an acre on a 200 pound blend of fertilizer.
There are a growing number of producers broadcasting their sulphur needs this winter to help save time next spring. We’ll look at the reasons why and the economics driving this practice. I’ll also share an interesting concept on the way we look at managing our nutrient elements, a topic that came up at the Direct Seeding Advantage conference last week.
Broadcasting Sulphur Fines a Growing Option
A growing number of producers are choosing to broadcast sulphate fines over the winter in order to save drill fill times in the spring. Sulphate fines are less expensive than regular sulphate because the density of the product is inconsistent; it's more of a by-product from granule manufacturing. Fall broadcasting sulphur fines eliminates 100 pounds of product from a spring fertilizer blend and also comes at a lower cost than regular sulphur. Let's look at the numbers.
Fill time: You can increase the number of acres seeded per tank, which is very important for farmers with limited labour available to help with seeding. By eliminating 100 pounds an acre of product in a spring fertilizer blend using a 430 bushel tank, that's an increase from 55 acres per fill to 86 acres per fill or a gain of 56%. Make sense?
Cost difference: Most producers are applying 21-0-0-24 sulphate fines this fall at 100 pounds an acre at the current price of $255 a tonne or $0.11 per pound of product. The cost of application is $6.00 an acre by a floater. The cost of granular sulphate (regular size) is currently $385 a tonne or $0.17 per pound of product.
At a rate of 100 pounds an acre the cost of applying sulphate fines is $6.00 an acre less than regular spring applied ammonium sulphate. Add on the cost of application, coincidentally priced at $6.00 an acre and the cost is a wash with no difference in price and 100 pounds less product to apply next spring. Not bad.
As we know, there are risks with fall broadcasting. The biggest risk of broadcasting sulphate on snow or frozen soils is the possibility of water moving it away from the target site. Just like nitrate, sulphate has a negative charge and is not attracted to negatively charged organic matter or clay so it sits in suspension, waiting to be moved down into the soil via water. If a large runoff occurs in the spring on frozen soils, sulphate with will move with the water and end up in the low spots with nothing on the slopes.
Managing Carbon for Optimum Yields
Studies have shown that elevated levels of CO2 within the crop canopy increase seed yield in high yielding agricultural crops. The reason for increased yields is due to higher levels of photosynthesis and improved water use efficiency. Meaning, under a high CO2 environment, plants can increase the amount of sugars they produce (energy = grain) and make better use of the moisture they receive (bushels per inch), a winning combination. As an agronomist I tend to focus on fertility as it relates to N, P, K, S and micronutrients. However, adding organic carbon to our agronomy portfolio may be the next step to achieving high yields.
Let's take a look at what we can do to increase carbon in our soils.
Elevating CO2 in Soil Equals Bigger and Better Roots
Did you know that 95% of plant nutrients are concentrated in the top six inches of the soil and 75% of available water comes from the top 24 inches? That being said, in order to extract as much water and nutrients from the soil we must do everything possible to maximize root production. Studies have shown that the total amount of water removed and the rate at which it is removed is directly proportional to the length and density of plant roots. Bottom line: a wheat, barley or canola crop will explore more soil at greater depths at faster speeds in a high carbon environment.
So what can be done to increase CO2 in Soils?
Increase soil organic matter. I wish I had a sexier answer for you but in a nutshell, that's what has to be done. Some call it organic carbon, others call it organic matter. What is it really? Organic matter is composed of dead animal and plant material in various stages of decomposition but most of all it consists of about 50% carbon. If we wanted to increase the organic matter in our soil by 1% we would have to add 20,000 pounds of plant material. A 45 bushel wheat crop will produce roughly 2,700 pounds of straw and chaff plus root material. You can see why it takes so long to build up organic matter.
My Proposal
I know through VRT soil sampling I have areas within fields that vary by 6 and 7% in organic matter. The simplest way to improve organic matter quickly is by applying compost but it's not usually economical to apply it across the entire field. There's a business in the Acme, AB, area that charges $75 an acre for five tonnes of applied compost. That works out to 11,000 pounds or 0.5% of organic matter per acre. If you look at the field below, we have an area that has 1.3% organic matter and represents 10% of the field. If we could apply 10 tonnes of compost in that small area and improve production by 20%, it would be a minimal cost overall and we could begin the path to rebuilding soil structure and organic matter.
Building carbon in the soil is not a quick process and we all know by now that zero-tillage is the answer but that's been said so many times. I feel the greatest benefit to doing something right now will come from VRT technology where fields are divided into zones and organic matter zones are created and managed separately by applying compost at different rates as required.
http://crop.scijournals.org/cgi/reprint/42/1/131.pdf
Market News
Low Sunspot Activity for 2008 Means High Wheat Prices
I've been made a believer in sunspot activity and its prediction strength for wheat prices. The graph below shows wheat price on the left axis and sunspot activity on the right axis. What's important to notice on low level sunspot years is that the line graph dips down and the price of wheat goes up. Low sunspot levels create a climate of reduced wheat production which leads to high prices. This year experienced low sunspot activity and look at what wheat prices did! The National Oceanic and Atmospheric Administrationis predicting low sunspot activity for 2008 which is an indication that wheat prices will remain high.
World Oilseed Prices to Climb
World oilseed supply growth has accommodated demand growth by increased harvested area (~70%) and yield growth (~ 30%). Except for 2007, world grain demand growth has been accommodated by a draw down in ending stocks (~ 65%) and yield growth (~ 35%). This is an unsustainable trend that can only be reversed through the market offering profit to growers or by government policy, something that could take two years to fix.
Source: Ag Value
Canola Chart Breaks out of Trading Range
The March and May canola futures charts have broken out of their three-month $20 a tonne trading range, which is usually followed by a large upside or downside move in the market. The market just moved to the upside. The last time canola broke out of its $20 trading range was in early August and gained $55 a tonne. March canola has gained $15 a tonne since I mentioned it two weeks ago when it was about to break out of its trading $20 trading range. There could still be another $15 to $30 a tonne to gain on this upside move given the strong fundementals driving this market. SL
U.S. Weather Update
The Midwest should see normal to below normal precipitation in December, but then turn wet for January and February, especially in northwest areas. The northern Plains will lean to the wet side, while the southern Plains are expected to remain dry. This pattern leaves the Plains winter wheat crop at risk of winter kill over the next few months with wide temperature fluctuations and poorly developed root systems.
Source: Farm Futures Daily
Local Feed Barley and Feed Wheat Prices
The price for feed wheat in the Calgary and Red Deer area is hovering around $205 to $215 a tonne for November delivery. Feed barley prices range from $185 to $189 a tonne for November delivery. Corn purchased in the Calgary area last week averaged $187 a tonne. SL
CWB Wheat PRO Reflects High Dollar, Volatile Market
The CWB today released its latest Pool Return Outlook (PRO) for the 2007-08 crop year and the first PRO of the year for feed barley in Pool B, which runs from Feb. 1 to July 31, 2008. The PRO for milling wheat is $3 higher to $6 lower than last month's PRO, due to a strengthened Canadian dollar and recent declines in volatile world market prices. Milling durum PROs are $4 to $6 lower compared to October, due primarily to the high dollar. The PRO for Pool A feed barley is unchanged from last month. Two-row malting barley is $3 lower, while six-row is unchanged.
See CWB PRO
Spring Wheat Market Update
International wheat values moved lower due to aggressive Russian exports in advance of a 10% export tax imposed on November 12. Argentina's values have also declined considerably as it moves into its wheat harvest period. This decline in prices has been halted by news of a widespread frost throughout the southern growing areas of Argentina. The spring wheat market has been stronger than the winter wheat markets, with Minneapolis futures now $0.66 higher than last month. The durum market remains tight and is expected to remain volatile until the new U.S. and European crop is available in the summer of 2008. This will support high durum prices throughout the year.
Source: CWB
Feed and Malt Barley Update
The feed-grain situation in Europe has stabilized as corn from Latin America and sorghum from the U.S. has reached the market. Corn continues to provide a price floor for feed barley. Saudi Arabia has uncovered demand but, given high ocean-freight rates, Canada has a significant freight disadvantage for shipping to Saudi Arabia relative to Europe. The tightness of the global feed grain supply situation should ease as a record-sized U.S. corn crop will be available for export and new-crop corn will be available from Argentina and Brazil in spring 2008. Feed barley exports from the Black Sea region will be limited as Ukraine continues to limit exports and Russia has implemented a 30% export tax on barley.
Malt barley prices have been volatile over the past month. Demand continues to be sluggish as buyers are well covered. However, quality concerns in Canada and the U.S., as well as recent frost in Argentina, are supportive of malt barley prices. The Australian malt barley crop also has quality concerns related to high protein levels and reduced test weights. Depending on how extensive frost damage is in Argentina, malting barley prices could move higher.
Source: CWB
China Demand Seen as Trump Card
Rising food costs are expected to decrease Chinese agricultural exports, while increasing imports. The impact on U.S. markets was evident last week Tuesday, with China purchasing another 3.9 million bushels of soybeans, 20,000 tons of U.S. soyoil and it was rumoured to be closing a significant deal for U.S. pork. Meanwhile, South Korea purchased 14.7 million bushels of U.S. corn as alternative supplies from China begin to dry up. Look for China to be the hidden trump card for the 2008 U.S. agricultural markets.
Source: CWB
