Keeping producers on the cutting edge of marketing is the goal of LSU AgCenter economists Naveen Adusumilli and Michael Deliberto. The work Deliberto does helps producers market their products for the best possible price.
Some of the his work focuses on farm commodity programs and cost of production estimates for corn, soybeans, grain sorghum and wheat, he said.
“With the funds that we are provided, we develop projected cost of returns so that we can provide producers with planning information for the upcoming crop year,” he said. “We make this information available to the producers in the form of decision aids that allow them to input their own numbers.”
Normally, the producers would be looking at how their returns are sensitive to market prices, but this year the focus has been on input prices, he said.
“So, this allows growers to estimate how a 10% increase in the price of fertilizer will affect the profitability of a corn crop, for instance,” he said.
The information is available each year in January, so growers have a bit of a window to do their estimations before planting time.
Deliberto also works with crop insurance estimates and the potential payments growers can receive from U.S. Department of Agriculture programs.
Growers have been concerned with the cost of inputs, mainly because of supply chain issues. The price of fertilizer, however, has not been affected by the war in Ukraine as much as was expected, he said.
“We produce a lot of the nitrogen and phosphorus for our fertilizers, but we import a large amount of potash, with the bulk coming from Canada,” he said.
The increasing costs of the raw materials, such as natural gas, used in producing the fertilizer are a major factor in the final cost.
Deliberto said the increase in commodity prices will help to offset the increased cost of production, but their profit margins will remain relatively flat, he said.
AgCenter economist Naveen Adusumilli also looks at ways to help farmers by evaluating production decisions that are economically and environmentally sustainable.
“Some of the projects that I have been working on include the Climate Action Plan, Louisiana Department of Agriculture and Forestry and the Environmental Protection Agency’s interest in hypoxia,” he said. “We look at how all of their conservation programs affect the soybean farmers’ decisions as it relates to conservation practices.”
A goal of Adusumilli’s work is to reduce the amount of nutrients in water bodies, which in turn reduces hypoxia (low oxygen levels) in water.
“Most of our farmers are pretty progressive, so what I try to do is look at the different conservation programs to help the growers make a more informed decision,” he said.
Each year, Adusumilli and his graduate students add one or two objectives that fit into the national priorities.
“So, the project goes year to year, but the development of information for growers is ongoing,” he said. Johnny Morgan
The LSU AgCenter and the LSU College of Agriculture