The Hancock-Henderson Quill, Inc.


STORM CLOUDS ARE GATHERING

The Wisdom Of Barnyard Bruke

The United States went from being the largest exporter of nitrogen fertilizer in the 1980s to becoming the largest importer in the 1990s.

U.S. production declined in the 1990s as the price of domestic natural gas increased.

Imports of nitrogen - mainly from Trinidad and Tobago, Canada and Russia, all with lower natural gas prices quickly filled the gap.

About 62% of nitrogen and 80% of potash consumed in the U.S. in 2006 was from imports. Because of limited domestic production capacity, increased fertilizer demand will have to be met largely by imports.

In 2007, U.S. nitrogen net imports increased 27%, to 10.2 million tons, 2.2 million tons above 2006 imports.

For July-December 2007, net imports of nitrogen increased 34% to 4.8 million tons, which is 1.2 million tons above net imports for the same time period of 2006.

Nitrogen imports in these six months are expected to be used on 2008 crops.

In 2007, US potash net imports increased 22%, to 7.1 million tons, 1.3 million tons above 2006 net imports.

For July through Dec. 2007, imports increased 15% to 3.2 million tons, which is 400,000 tons above net imports for the same time period of 2006.

Potash imports in these six months are also expected to be used on 2008 crops.

Russia is expected to place a 9% export tax on fertilizer.

Cattle feeding returns on US southern plains commercial cattle are losing about 125 dollars a head.

Iowa/Southern Minnesota-farrow to finish-estimated returns are projected to lose about $30 per head.

World demand is likely to grow by 70 mmt (2.57 billion bushel) in ten years.

Strong demand will require ever increase production of soybeans, and boost world trade of soybeans (and/or soy products).

The only question is, where will the soybeans be crushed-in the producing country (U.S., Brazil, and Argentina), or the consuming countries (EU, China, Japan, Mexico, or the Middle East).

Mid-January '08, Iowa State University Climatologist Elwynn Taylor was quoted as saying the current LaNina is adding to below normal subsoil; the 19 year drought cycle and drought in South Carolina; and has led to a 68% chance of a below-trend U.S. corn yield in 2008. Dr. Taylor noted that the U.S. cornbelt is now "overdue" for a major drought.

Right now that seems a little hard to believe with all the rain we have been having, but this can change quickly, also.

As I was relating these facts to Cornelius Farkward, he exclaimed that it looks we are in for a wild ride this upcoming year with the prices, costs, and uncertainty as presented by these facts.

I was reminded of two old farmers in western Illinois, one from Henderson County, and one from Hancock County, that went to take their tests for their CDL license.

It seems they were wanting to buy one of those high fangled semis with hopper bottom trailer to haul corn to the ethanol facility in West Burlington, Iowa.

When they went to the driver's license exam station, they discovered they were required to take the written test.

These good ole boys were not confident of their readin' and written' skills so the examining officer agreed to give them an oral test.

During the test the officer asked these two farmers a question to determine their skills in an emergency.

The Henderson County farmer was asked what he would do if he was passing on a steep hill and around the curve comes another semi at a close distance at a rapid speed, and his neighbor from Hancock County was in the semi with him sleeping.

The officer asked the Henderson County farmer how he would react to this situation.

The Henderson County farmer quickly replied with full confidence, that he would immediately wake up his Hancock County friend.

The officer with a puzzled look on his face, questioned the Henderson County farmer as to why he would react with that response.

The Henderson County farmer replied without hesitation, that he needed to wake up his Hancock County friend because he knew that he ain't never witnessed such a terrible accident as they were about to have.

Maybe, something like this is what we are about to experience this upcoming crop year. Keep the faith Larry D and Mike B. I want you boys to gather at the feed store, thoroughly discuss, and come up with a solution for us on this potential problem we might face. It might be a good idea to include Curt E. in the problem solving portion of this discussion.

See ya later,
Barnyard Bruke