Tight nitrogen supplies could lead to a decline in global planted corn acres next year
An ag economist says the cost and availability of nitrogen could limit global corn production during the next growing season.
Kevin McNeil with Farmers Business Network says natural gas supplies that help create nitrogen are extremely tight. “We think the rest of the world especially in Europe, especially in South America where they don’t have natural gas inventories like we do in the U.S., they’re going to face really, really steep challenges getting low-cost nitrogen.”
He says the last two years nitrogen costs have increased 400 percent and in Europe it’s jumped 3600 percent, but there’s good news for U.S. farmers. “They are well positioned to capitalize longer term because of our availability of natural gas and hence get lower cost, relatively lower-cost nitrogen versus the rest of the world.”
McNew tells Brownfield some farmers could pull back on planted corn acres because of the cost of nitrogen and other factors, which might add some support to the markets. “Not only because of moisture problems, but also because of runaway inflation and hyper costs associated with corn production. If anything, I’m talking with farmers about this is the time to be holding on to corn in the U.S. and maybe being a little more aggressive at selling your beans because South American growers will probably be more aggressive with beans than corn this year.”
McNew spoke with Brownfield at the 2022 Farm Progress Show in Boone, Iowa.
Kevin McNeil, Chief Economist with Farmer Business Network: