Market Pulse
Diesel remains the biggest cost pressure heading into the heart of harvest. The national average diesel price fell slightly to $6.20 per gallon for the week ending Oct. 5, but remains about $2.49 higher than a year ago. Midwest diesel averaged $6.29 per gallon. At the same time, crude oil prices are climbing again on concerns about global supply disruptions. U.S. Energy Information Administration
Fertilizer prices continue to move higher. DTN reports that all eight major fertilizer products are now more expensive than a year ago, with anhydrous ammonia averaging $979 per ton, up 20% from a year ago. Urea is up 12% and MAP is up 6%. Seven of the eight products also increased compared with the previous month. DTN PF
Harvest is progressing, but remains behind the five-year average. As of Oct. 4, 23% of the U.S. corn crop had been harvested, compared with a five-year average of 27%. Soybean harvest reached 25%, compared with a 33% average. Corn futures were around $5.05 per bushel Wednesday morning, while November soybeans were near $13.05. Successful Farming
Steel costs remain a concern for manufacturers. U.S. hot-rolled coil prices remain elevated, with October futures around $1,276 per short ton as of October 7. November futures were near $1,300, while December contracts were around $1,320, signaling continued upward pressure. Tight domestic supply, lower steel imports and tariffs are keeping the market firm.
🚜 What Manufacturers Should Watch
Diesel, fertilizer and steel are putting continued pressure on farmers and manufacturers as harvest moves forward. Grain prices are holding relatively firm, but delayed harvest and elevated production costs could influence farmers’ purchasing decisions. For equipment manufacturers and dealers, orders, backlogs, inventory levels and replacement-equipment demand will be important indicators to watch as producers balance high operating costs with equipment needs.
Sources: USDA, USDA-NASS, CME Group, U.S. Energy Information Administration (EIA), Reuters, DTN and industry market data.