Since 2006-2007, fertilizer prices have nearly mirrored corn prices, meaning profit margins require more than just hedging corn or soybeans sales at an attractive price.

“In the past, if you wanted to lock in a margin, you just worried about the price of corn,” says Scott Irwin, U of Illinois Extension economist. “Now, you have to be concerned with timing on inputs and output. Corn might go to $8, but if N goes to $1200, it eats your profit.”

Adam Dryer, consultant for Blue Reef Agri-Marketing, Morton, Ill., an introducing broker for FC Stone, says FC Stone graphs (see graphs) show how prices for UANand anhydrous ammonia have tracked corn regularly in recent years.

“Growers can use this knowledge to help determine when to lock in their inputs as well as corn prices,” Dryer says.