Fertilizer Market Report - Looks like trouble ahead...

[joedales]

Here is a link to the Wells Fargo Fertilizer Market Report...

Looks like higher prices ahead....huge demand with increased acres and global demand..

Anyone have any ideas on how to manage crops and fertilizer to maintain profits?

Click on the link to see the pdf report.

<a href="https://www.wellsfargo.com/downloads/pdf/com/research/agricultural/agupapr08fertilizer.pdf"target="blank"><u>Wells Fargo Fertilizer Market Report.
</u>Wells Fargo Research.
</a><br>

[TOM4CWB]

Joe,

Don't spend more on fertilizer... than you can pay off in the next 6 months... CASH.

If we speculate... end up short on revenue... and bankrupt... who will even blink?

I see no tears from gov. on the plight of hog producers... just a 'how sad... too bad' see you later attitude.

What is the solution... when there is a structural shift? The world is short of food... yet food producers are going out of business... right left and centre.

There is no question... we are headed for a big mess in our food markets!

[jensend]

tom from business plans we put together over the period of about 1995 to 2003 i would say the structural shift you refer to now actually really got rolling in about 2000. the main change in structure has been in the concentration of ownership of everything but farms. in spite of everyone's fascination with growing farms, farm property is still widely held compared to the inputs sector (including credit)or the grain handling and marketing sectors. when you look back to the time after the last real grain price increase (the 80's) what other industries realized is that they could insulate themselves from increased costs and high interest rates by mergers and acquisitions and passing all costs on with little risk. that's when the structural change in agriculture took another leap and since about 2000 has been gaining big momentum. what to do about it? - wait for the crash and try to take advantage of that maybe? what do you think?

[Burbert]

Don't use too much fertilizer. Grow some peas, grow some clover, summerfallow. Grow a smaller crop, produce less, that way prices stay up and the demand remains constant. Pick some rocks, kill some weeds, apply for government programs and assistance (do it yourself, save some cash). Talk to grain guys, who knows, maybe they can help out with some cheap cow food. DON'T BORROW. Lets solve the problem together by not working against each other, and pandering to angribusiness and getting sucked in, yet again!

[Ron]

Buy manure from a hog guy instead of whining when you have to pay part of the hauling, look at the nutrient value instead of chiseling him down to nothing. It might help you keep a market for that frozen wheat this fall.

[SASKFARMER3]

On our farm its simple get to a point of no Suppler credit and any operating. The 07 Crop just about got us there. Pay down debt as much as can, keep purchases of equipment to a minimum, Build up savings. Then when the crash happens see who wins. Its simple do opposite of what the rest are doing. Sad part is fact that Feb 25 2008 might be our highest prices ever received for our product, then the sh--hit the fan. Pay down debt is still king. I feel the 07 crop was the high point. But still funny when the world is so short of food yet who is winning Sask potash, Oil, Grain companies. etc.

[SASKFARMER3]

Jan 03, 08 390 374 351 1400

Jan 10, 08 413 388 349 1400

Jan 17, 08 425 378 356 1400

Jan 24, 08 425 365 390 1400

Jan 31, 08 510 343 396 1400

Feb 07, 08 522 323 388 1400

Feb 14, 08 553 328 389 1400

Feb 21, 08 565 329 405 1400

Feb 28, 08 565 324 414 1545

Mar 06, 08 565 338 442 1545

Mar 13, 08 560 377 453 1545

Mar 20, 08 558 397 458 1727

Mar 27, 08 535 398 459 1727

Apr 03, 08 515 393 452 1727

Apr 10, 08 480 422 494 1727

Apr 17, 08 450 495 494 1727

Apr 24, 08 463 540 490 1727
latest gulf fert prices.

Ammonia up a bit rest flat.

[cottonpicken]

I vote excatly opposite.

[SASKFARMER3]

WHY NOT BUILD SAVINGS FOR POOR TIMES HOG GUYS ARE GOING DOWN EVERY DAY AND THEY WERE FLYING HIGH A YEAR AGO!

[boarderbloke]

Cotton, are you suggesting -Buy Now-, while your cash still buys something. buy 'tangibles', ie: equipment, bins, etc ??? because in a year or two, your cash won't buy you anything, or items won't be available, either not made or exported ??? if this is your line of thinking, i would be one to agree with you!

[boarderbloke]

anyone think this might have something to do with markets over the next 2-4 yrs or maybe 20-30 yrs!
more at smalldeadanimals.com (April 30th)

[cottonpicken]

Your right boarder.

Sask didnt you just buy a bunch of land and combines?

The land probably increased more in value than money in the bank.The combines may have increased to.I know the sprayer i bought last fall has.

Tom is also right,dont take on what you cant handle.

But saving money??????????

[charliep]

I suspect SK3 is not talking about saving money but rather how you use. Not relying 100 % on operating credit to put in a crop but rather using some of your own money. Not using up working capital by paying cash or making large down payments on fixed assets like land and machinery. Knowing the financial ratios on your farm and understanding that leverage is good thing in good times but can kill down the road.

Finally, depending on your age and business goals, it may not be such a bad idea to have an investment portfolio from the extra money I assume you have made in 2007 and plan on making in 2008. The most successfull farmers I know used profits to establish an investment strategy outside the farm. They did this to maintain a healthy balance sheet.

[SASKFARMER3]

No I have one more year of Dep in combines so will keep till 09, their ordered. But yes the land I bought last spring is worth 140% more if the latest sale one mile away is a good comparison.
But I believe last year was the year to buy. What I am saying is pay down debt yes buy certain equipment that's needed but paying down debt should be a priority. But for any one looking at
a grain cart order and buy now going up 17% tomorrow on any factory orders plus most dealers are getting half what they ordered.

[Hopperbin]

Sask I think the high point could be 08.
If I grow an average crop 08 pencils out better than 07 even after a 50 percent increase in fertilizer cost with the fertilizer paid for by the end of the year.
Cotton I think paying down debt would be the same as saving money.