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Bushel Balance: A Better Way to Balance Yield and Input Costs

May 6, 2019

Agronomy, Crop Management, Grain, Soybean, Technology

Profitability in today’s volatile agriculture economy takes more than high yields; profitability requires a marketing plan and a solid execution strategy. At The Arthur Companies, we have done the work to make marketing your crop an easier part of your day-to-day operations. We have tracked fertilizer costs in relationship to new crop prices to create the Bushel Balance.

The Bushel Balance

Bushel Balance, simply put, is a calculation of the number of corn bushels and selling price a grower needs to achieve to break even on a per-acre basis of corn fertilizer application. Bushel Balance can help your operation make a more informed decision when locking in fertilizer volumes and prices, as well as, the number of bushels of new crop corn you would have to contract to cover fertilizer inputs.

Bushel Balance Value

Selling a portion of next year’s corn crop when you lock in your fertilizer needs is a smart way to hedge the costs of your inputs. And because seasonal highs in input prices are often driven by supply and demand logistics, the valleys forecasted in the Bushel Balance can signal value in the fertilizer market and give confidence to both the timing and volume of your input purchase decision.

With 16 years of data, the input trends have allowed The Arthur Companies’ team to produce a Bushel Balance index that works, and while crop yield and use rates are assumed, the highlights below definitely tell a story.

2003-2019 Bushel Balance Observations

  • The first quarter of a fertilizer year (July, August and September) is often the best time to purchase fertilizer for next year’s crop. The average Bushel Balance in those months has been 22.50 bushels of corn.
  • The highest bushel balance that we have recorded was 30.3 bushels on July 1, 2005.
  • The lowest on record was 17.4 on June 10, 2014.
  • The current Bushel Balance is 25.3 and the fertilizer year started in July 2018 at 22.4 bushels.
  • When corn futures were $6.73 per bushel, the Bushel Balance was 25.7. When corn futures were $2.40 per bushel, it was 23.5.

Where to Find the Bushel Balance

Look for the Bushel Balance to be featured on both the Arthur Companies’ Facebook and Twitter accounts and be sure to follow both for up-to-date information on Bushel Balance and important updates from the team at Arthur!