New Crop Curves Higher corn prices have long encouraged planting more acres of the crop. The correlation between rising corn prices and higher crop nutrients prices is rooted in the 2005 natural gas price spike, which drove several domestic fertilizer manufacturers out of the market. “Now we rely on overseas suppliers in a bigger way, with as much as 50 percent of U.S. nitrogen supplies coming from overseas,” says Keith Swanson, CHS crop nutrients dealer risk management services. “It seems the industry now is pricing more on growers’ ability or willingness to buy, rather than its own cost of production.” Swanson monitors per-acre margins based on current corn and urea prices, using an index he calls proxy acre margin. “It measures a grower’s margin after selling corn and simultaneously buying urea; it shows that the lower corn pricing moves, the more quickly growers will reject higher urea pricing.” — Steve Richter Your CHS Connection 17