Don't forget these 2022 lessons as you plan for 2023 uncertainty

One thing about 2022: It wasn’t dull. Inflation. Supply issues. Crop maladies. Volatile markets keyed by turbulent weather and the Russian invasion of Ukraine.

Here’s a look back at 2022 and how it can help you plan for 2023.

Market Mayhem

By Cassidy Walter

This year, the commodities markets were wrought with “unprecedented volatility,” largely due to Russia’s invasion of Ukraine, says Al Kluis with Kluis Commodity Advisors.

“All of a sudden that production and being able to get it out of the country became uncertain and the size of the ’22 and ’23 crop became uncertain, so it really made the end users panic,” he says.

Kluis was also surprised at how similar the timing of the 2022 corn and soybean markets was to 2021, with market highs in May and June. Yet, he cautions 2023 may be substantially different.

Another hallmark of 2022 was the explosion of input costs for everything, including fertilizer, fuel, and equipment.

Here’s what Kluis is watching as 2023 shapes up:

The growing level of drought in production areas. “Unless we get some miraculous and timely spring rains, it will be an area of concern for next year,” he says.
The cost and availability of fertilizer.
The uncertainty of China’s demand for U.S. goods.

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Inflation and Supply Chain Issues

By Gil Gullickson

You may not have the lava lamps and leisure suits that accompanied 1970s-style inflation. Still, inflated prices that bedeviled farmers in 2022 show no signs of abating in 2023.

“The whole cost structure of most farms has changed,” says Kluis.

“I don’t think it’s a temporary blip, unfortunately,” says Eric Hansotia, AGCO president and CEO. “I think it’s with us for two to four years."

Supply chain issues also continue to reign. AGCO is currently wrestling with finding enough parts to build machines amid spiking demand, Hansotia says.

“We have more orders now than we’ve had in the history of the company,” he says. “One of our toughest components to acquire are semiconductor chips. Rather than the usual cost of $10 to $20, our last batch cost $1,400. They are crazy high prices, but we decided to bite the bullet and pay that high price because the overriding priority was to deliver the equipment to our farmers.”

Seed Price Hikes

By Gil Gullickson

No surprise: Farmers paid more for seed in 2022 than in previous years. Higher seed costs had been building since the advent of COVID-19, but they didn’t hit farmers until 2022, says Sam Taylor, Rabobank farm input analyst.

“There tends to be an 18-month lag time from when companies start producing the seed before they can pass that cost on to the farmer,” he says.

Expect this to continue into 2023 and beyond. Unanticipated events, such as U.S. drought and the Russian invasion of Ukraine, helped spike grain and oilseed prices.

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“This enabled gross [farmer] profits to swell and create a decent financial environment,” Taylor says. “Seed companies are going to be more opportunistic [on seed prices] and they may not get as much pushback from growers.”

Not all news is bleak on the seed price side, though. “In the last year, seed has gone up the least of any significant ag input,” says Tim Birkel, marketing director for Wyffels Hybrids.

Farmers also glean more for their money from new seed varieties. “Seed pricing has a pretty decent correlation with the value that it creates,” says Taylor.

“Our statistics show that over the last 10 years, a new product delivers about a 2.7 bushel per acre [annual yield] increase,” Birkel adds.

Expect elevated seed prices to last for a while. “Statistically, seed pricing is slower to come down than it is on the way up,” Taylor says. “You may see 2024 seed price increases as well.”

Fertilizer Spikes

By Gil Gullickson

Fertilizer costs zoomed in 2022, according to USDA data analyzed by University of Illinois agricultural economists Gary Schnitkey, Nick Paulson, Krista Swanson, and Jim Baltz, along with Carl Zulauf, an Ohio State University agricultural economist.

Average anhydrous ammonia prices tallied $1,318 per ton, diammonium phosphate (DAP) prices were $947 per ton, and potash levels hovered around $857 per ton on September 22. In comparison, January 2020 saw approximate per- ton prices of anhydrous ammonia at $500, $400 for DAP, and $390 for potash.

The good news is fertilizer supplies should be ample.

“There’s probably not going be any shortage of product at the price you’re willing to pay,” says Taylor.

Nitrogen fertilizer prices will particularly be affected by tightening natural gas supplies because of the Russia-Ukraine war. Natural gas is a component used in making anhydrous ammonia.

“There is a dynamic where you are seeing nitrogen prices going up and staying up,” says Taylor.

This also applies to phosphorus, as ammonia is a key part of MAP (monoammonium phosphate) and DAP, Taylor says.

Better news exists for potash because of ample supplies. “There might be a slow trickle downward in pricing,” he says.

In some cases, farmers are pushing back against higher fertilizer prices.

“In 2022, you saw some products get to the point where some farmers said, ‘You know what, I’m going to pass on that,’” Taylor says.

This occurred in California, where farmers curtailed the use of ammonium sulfate because of cost. “As a result, that inventory is lagging into this season,” says Taylor.

Still, it’s prudent to line up 2023 fertilizer supplies in advance in case spot shortages occur, says Taylor.

Chemical Outlook

By Gil Gullickson

Unlike 2022, fewer supply constraints with chemistries such as glyphosate and glufosinate (Liberty’s active ingredient) will occur in 2023, says Nick Seibert, U.S. crop protection product manager for Farmers Business Network.

“Glufosinate prices should be down for 2023, with glyphosate [prices] depending on Chinese production,” says Seibert. “I see dicamba and 2,4-D prices going up a little bit.”

That’s because of increased demand. “Both are widely used in burndown,” Seibert says. “We had a great spring for burndown products and we had a great fall for burndown herbicide products. With higher glyphosate prices, farmers are using different chemistries for burndown and not leaning on glyphosate as much as they used to.”

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Paraquat costs will likely rise in 2023, says Seibert. Its German production could be tightened due to higher European energy costs spurred by the war in Ukraine and a looming 25% tariff, he says.

Preemergence herbicide supplies should be ample in 2023, says Dean Grossnickle, Syngenta technical development lead. That’s good news for nixing early emerging weeds.

“We need to apply robust rates of preemergence residuals [herbicides] to keep waterhemp or Palmer amaranth at bay,” he says. “Those weeds are very tough to control. Overlapping postemergence herbicides once preemergence residuals have helped curbs late- season escapes.”

Seibert expects no supply constraints to interrupt fungicide products like azoxystrobin and propiconazole, he says.

“We’re hoping those stay more in line with 2022 pricing.”

Rainfall Dictates 'Feast or Famine' Yields

By Chelsea Dinterman

Water was key for the 2022 crop yields. While many parts of the Corn Belt faced drought, it was clear where rain fell.

“In south central Iowa, the crop looks hit pretty hard, probably 125-bushel-an-acre yield environment,” says Neal Borgmeyer, a Kruger Seeds technical agronomist. “Then you go to east central Iowa, and 300 bushels [per acre] is the potential there. You can definitely tell who got rain, when they got it, and how much. It’s feast or famine.”

The dry conditions kept disease and pest pressure low, but may have led to greater nutrient deficiencies. While farmers are likely to face inflated input prices again in 2023, soil samples will be vital before cutting fertilizer applications.

“You have to have good information to make your decisions,” says Bruce Battles, a Golden Harvest technical agronomist. “A knee-jerk reaction can really hurt you in the long run and be more costly than what it seemed.”

Planting a range of maturities on different planting dates can help spread risk in 2023. Following sound planting guidelines rather than rushing to get seed into the ground is also essential.

“A lot of the sins that we see throughout the year start when we push it with too- wet soil,” Borgmeyer says. “I love to plant early, but I certainly don’t want to mud it in.”

New Herbicide Sites Of Action Coming

By Gil Gullickson

It’s been a long drought for truly new herbicide sites of action, with the most recent being Group 27 herbicides (HPPD inhibitors such as Balance Flexx, Callisto, and Alite 27) more than 20 years ago. That’s changing. Several companies in 2022 announced new herbicide sites of action are in the works. The bad news? It will be the 2030s and 2040s before you see them.

Bayer plans to unveil its HT5 soybeans in the early 2030s with a six-way herbicide stack to:

Glyphosate
Glufosinate
Dicamba
2,4D
HPPD inhibitor (a Group 27 herbicide)

This stack is topped off by a new herbicide site of action. “Its best activity is on grasses, but it also has some pretty impressive broadleaf activity,” says Bob Reiter, who heads crop science research and development for Bayer. “One of the unique points about this chemistry is that after weeds are sprayed, they stop growing. This provides cover to stop other weeds from developing.”

The new herbicide site of action aims mainly at burndown applications, but could go down preplant or early postemergence, say Bayer officials.

A long-term agreement between BASF and Corteva also is developing a soybean trait that tolerates:

BASF’s Liberty and PPO herbicides
Corteva’s Enlist herbicides
Glyphosate
A new herbicide site of action developed by BASF.

This new herbicide site of action is expected to be commercialized in the herbicide-tolerance soy system in the late 2030s, say BASF officials.

Pest Challenges

By Gil Gullickson

Myriad maladies occurred in 2022 fields that present challenges for 2023. They include:

Corn rootworm. This insect once again reared its root- chomping head in cornfields in 2022.

“Our monitoring network showed that in continuous cornfields, we’re definitely above threshold all across our marketing area,” says Brent Tharp, agronomy and product training manager for Wyffels Hybrids. “In first- year cornfields, the pressure is less so.”

Corn rootworm resistance to resistant traits complicate matters. “I’ve been telling farmers we have lost our easy button, because there are [rootworm] populations that are eating through traits,” says Tharp. “It used to be that when you planted a trait, everything was going to be fine. Those days are behind us. You have to know what is going on in your fields.”

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Monitoring of sticky traps in late summer enables seed companies, crop consultants, and farmers to track the situation. Adult beetles caught on sticky traps indicate fields where egg-laying is occurring.

This could trigger larval infestations in 2023.

“Knowledge is power,” Tharp says.

Tar spot. This new fungal corn disease continued its yield-robbing march in 2022, although it wasn’t as aggressive in most areas as expected.

“We didn’t have the leaf wetness combined with the moderate temperatures that tar spot likes,” says Syngenta’s Grossnickle, “From June into July, it dried out, so there was little disease progression as we turned the calendar into August and September.”

Still, tar spot looms as a 2023 threat. Hybrid selection is a good way to curtail it. “If farmers plant a hybrid that’s susceptible, we will see more and more tar spot development,” Grossnickle says.

Farmers may also use fungicides to manage tar spot. Purdue University researchers found early fungicide applications from VT (tasseling) to R2 (kernel blister stage) worked best in 2019-2021 Purdue trials. Meanwhile, fungicide applications from R4 (kernel dough stage) to R5 (dent or denting) achieved little control.

“Once you see tar spot lesions, there is little you can do about it for that year,” Grossnickle says.

Weeds. “This is the second year in a row [in central Iowa] where we didn’t get as much crop canopy as needed in soybeans,” says Grossnickle. Failure to canopy gives late-emerging weeds license to poke through soybeans and shed seed that spurs misery into the next year and beyond.

Canopy failures caused mainly by drought were concentrated in 30-inch rows, Grossnickle says.

“We should be evaluating if going to narrow rows such as 15 inches will help control weeds,” he says. “We need something else besides a herbicide program.”

In some cases, spot cultivation may provide farmers with another nonchemical way to control weeds.

“There’s no resistance to steel, and that gives us one more tool for controlling weeds,” Grossnickle says. Automated guidance makes it much easier to stay on the rows and avoid the “cultivator blight” of your parents’ and grandparents’ day, he says.

Smart Farming Continues

By Alex Gray

Artificial intelligence AI) has arrived in agriculture and it seems to be here to stay. It’s been in your machinery for a while now, making that turn in the field just a little easier and that pass a little more precise. Now it’s positioned to help save on inputs as well, says Eric Raby, senior vice president of CLAAS for the Americas.

“I would say overt [apparent] autonomy is like a driverless tractor,” he says. “Covert autonomy sets itself on the fly — you still have a human being there, but the machine is basically doing all that together.”

John Deere kicked off 2022 with the debut of a fully autonomous tractor, and Case IH unveiled an autonomous spreader later in the year.

Don’t think you can kick back and relax while the robots tend to the farm just yet, however. Overt autonomy is still a few years off from consumer availability with safety regulation posed as a significant roadblock. Monarch Tractor, maker of a fully electric autonomous tractor, had its petition for use of its driver-optional tractors without a human operator denied by the California OSHA.

For now, expect to see more covert AI used in applications like precision agriculture — not just for ease of operation, but also to reduce the amount of inputs consumed while farming.

This type of technology will likely soon be found on everything in your machine shed, from New Holland’s updated Guardian sprayer all the way to John Deere’s Gator UTV line.

“For the future, we’re looking to sustainability even more, and precision agriculture is an element of sustainability — don’t waste any inputs, and get the most output you can,” says AGCO’s Hansotia.

Alternative Fuels Surge

By Alex Gray

The pressures of climate change for farmers were evident in 2022, encouraging manufacturers to investigate alternative methods of propulsion to curb reliance on finite, emission-heavy fossil fuels.

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“We’re definitely looking at electric drives on smaller tractors, looking at methane, looking at hydrogen — anything that can reduce the carbon footprint and use regenerative, naturally produced resources,” says Mitch Kaiser, marketing manager for Steiger tractors at Case IH.

Fully electric vehicles are on the way, but they are still facing limitations because of battery capacity and horsepower limitations. As of now, you’ll see battery power in compact tractors like Solectrac’s e25, a smaller 25 hp. tractor with about three to six hours of battery life depending on use. Fendt’s e100 75 hp. concept tractor has been in development for some time and will finally hit the market sometime in 2024. John Deere announced it would be ramping up battery production, adding more than 2 gigawatt hours to its total battery production.

“We are embarking toward a future with zero- emissions propulsion and pursuing our sustainability goal to demonstrate viable low- and no-carbon alternative power solutions by 2026,” says Jennifer Preston, global director for John Deere electric power.

CNH Industrial is aiming for a carbon-neutral approach with New Holland’s T6 Methane Power tractor set to hit the U.S. mass market sometime in 2023. This tractor will make use of biowaste from manure, and it will have a higher 145 hp. rated engine horsepower over electric power to boot.

Hydrogen power is in the works too, though that may be even further into the future with many companies still in the early research and development stage.