by PressGrowing corn in 2022 has the highest margins among other crops
Growing corn in 2022 will involve higher fertilizer prices
Experts evaluated the agricultural market and named the most profitable crop in terms of production. It turned out that corn cultivation in 2022 will have the highest margin.
Analysts at the U.S. Department of Agriculture said there will be about 1.4 billion acres of wheat, soybeans and corn this year. Worldwide, corn acreage has grown by 57 million acres in the past two years. Land holdings for soybeans and wheat have increased by 4.4 percent from 2019 numbers.
It should be understood that these allotments require large amounts of nutrients for farmers to get high yields. Fertilizer producers are already expanding capacity to meet demands from farmers. However, the limiting factor in this case is the cost of natural gas, which is relentlessly going up. In addition, there is a serious problem that there will not be enough energy to produce substances, as has already been seen in China. The same threat has arisen in the European Union and could also reach the United States.
The weather conditions are favorable and no significant drops in temperature, tornadoes or downpours are expected. Therefore, we can say that we have enough gas reserves for fertilizer production. Otherwise, some of the capacity will have to be suspended.
Farmers’ needs are growing and they are trying their best to expand crop areas and increase yields. These actions lead to an increase in demand for fertilizers, and the supply situation in the global market is getting tighter. There is serious competition between India, Brazil, China and the U.S. to supply chemicals to farmers. This competition is also fueled by farmers themselves, who try to stock up on fertilizers before the planting season for fear of a significant increase in price.
At the end of last year there were active rumors about a rise in price of pesticides and the producers even thought about reduction of areas planted for corn. However, this has not happened so far, and farmers are still planning to expand production of the crop. In addition, the experts note that even if fertilizer prices rise, corn and soybean cultivation will still remain extremely profitable. Therefore, it makes no sense to sacrifice the fertility of land for the sake of saving on the purchase of agrochemicals. Especially since the margin on corn promises to be quite high. Moreover, experts advise signing contracts to sell corn even today, to fix your future profits. In addition, futures allow reducing risks for producers, which is important, given the volatility of the market.