Table 3.1.4-Average application rates of nutrients on selected field crops in major producing States 1995 60 36 44 62 35 43 64 37 52 62 37 46 NA 0.9 0.9 0.9 1.0 0.9 NA NA NA 1.0 ΝΑ NA 1.6 2.0 NA NA NA 2.2 1.9 1.8 1 Data not available for manure or micronutrients. Major producing States generally account for 70-90 percent of each crop's acreage. For States included, see "Cropping Practices Survey" in the appendix. NA = Not available. Source: USDA, ERS, based on Cropping Practices Survey data. Acres receiving Manure Table 3.1.5-Manure and commercial fertilizer use by tillage type on corn for grain, 10 major States, 1990-951 Crop, year Commercial Commercial Commercial Average application rates Commercial Commercial Commercial nitrogen phosphate potash Manure Percent Table 3.1.6-Manure and commercial fertilizer use by tillage type on soybeans, 7 Northern States, 1990-951 Crop, year Pounds/acre Commercial Commercial Commercial Manure Percent Table 3.1.7—Manure and commercial fertilizer use by tillage type on winter wheat, major States, 1991-951 Crop, year Pounds/acre Commercial Commercial Commercial nr = none reported. 는 는 는 는 는 nr nr nr EEEEE nr nr nr nr nr nr nr nr EEEEE nr nr nr 는 는 는 는 는 nr nr nr nr nr nr EEEEE nr nr nr EEEEE nr nr nr 1 States include AR, CO, ID, IL, IN, KS, MO, MT, NE, OH, OK, OR, SD, TX, and WA in 1991 and 1992. AR and IN not surveyed in 1993-95. Source: USDA, ERS, based on Cropping Practices Survey data. acreage has varied between 315 million and 340 million acres. In 1994, acreage of principal crops planted equaled 324 million acres. Acreage and crop mix planted is dependent on many factors, including government programs, weather, expected commodity prices, input costs, and export market. Acres planted to corn and wheat greatly affect fertilizer use and prices. Corn is the most fertilizer-using crop, accounting for over 45 percent of all use, while wheat is second at 16 percent. Planted corn acreage has ranged from 60 to 85 million acres over the past 30 years and planted wheat acreage has ranged from 53 to 88 million acres. In 1994, approximately 79 and 70 million acres were planted to corn and wheat. To the extent that CRP and ARP acreage comes back into production as a result of contract expiration and higher crop prices, nutrient use could expand. Fertilizer Prices Fertilizer use in the United States has historically been inversely related but relatively unresponsive to changes in fertilizer prices, particularly in the short run. Analyses have found elasticities (the percentage change in fertilizer use per percentage change in fertilizer price) to run upwards from -0.19 in the short run and from -0.31 in the long run (after farmers have had adequate time to adjust operations) (Griliches, 1958; Denbaly and Vroomen, 1993). In some major Corn Belt States, the elasticities may be even less. One analysis of Indiana and Illinois data―using a model that allowed short- and long-run substitution among agricultural inputs (hired labor, feeds, seeds, fertilizer, pesticides, fuels, and capital) and that included a weather index-found elasticities of about -0.07 for corn both in the short and in the long run (Fernandez-Cornejo, 1993). Individual fertilizer product prices vary from year to year and substitution among products within nutrient groups does occur. Annual price changes among products can result in different combinations of products used by farmers from year to year. Fertilizer purchases have historically represented about 6 percent of total farm production costs. Total expenditures on fertilizer by U.S. farmers in 1994 are estimated at $9.1 billion, up 9 percent over 1993. The increase in expenditures is a combination of increased fertilizer prices, increased planted corn acres, and increased application rates over 1993. With current fertilizer prices, 1996 expenditures were likely to have exceeded those of 1994 and 1995. Throughout the 1960's, prices paid by farmers for most fertilizer products declined as growth in industry capacity exceeded growth in demand (table 3.1.8, fig. 3.1.4). Economic Stabilization Program regulations froze all prices in 1971 to control inflation, including fertilizer prices at the producer level (USDA, 1971-81). Prices were controlled in domestic markets but exported materials were not subject to price regulation. Demand for U.S. fertilizer in strongcurrency countries increased as the dollar weakened resulting in a two-price system for U.S. fertilizer, with export prices much higher than domestic prices. With the end of government control in 1973, domestic fertilizer prices increased over 60 percent and equaled world prices. Decontrol and the oil embargo brought sharp increases in fertilizer prices. By the spring of 1975, farm prices of most fertilizer materials had doubled from 1973. High prices reduced the quantity demanded, causing fertilizer manufacturers' inventories to increase in 1976. Consequently, farm fertilizer prices fell. Prices began to rise again in 1979 following another oil embargo and as a result of strong domestic and export demand and rapidly rising production, transportation, and retailing costs. Rising energy prices in particular were instrumental in increasing production costs, especially for nitrogen products. Prices of most fertilizer products increased in 1980 and 1981 and held steady in 1982. Fertilizer prices have changed less than other agricultural inputs during the last 10 years. For example, nominal prices farmers paid for fertilizers increased 18 percent from 1984 to 1995 while wage rates went up 51 percent, farm machinery increased 40 percent, agricultural chemicals other than fertilizers increased 28 percent, and seeds went up 16 percent. Farm fertilizer prices fell during 1983 and again in 1985/86 as a record level of crop acreage was diverted, first by the payment-in-kind program (PIK) |