Cost and price concerns heading toward harvest

SPRINGFIELD, Ill. — The cost and commodity price squeeze continues as it nears time to plan for next year’s crop and correlating fertilizer strategy.

“Everything that goes into producing a corn crop has increased considerably, and the commodity prices have been stable or stagnant and, in some cases, less,” said Don Guinnip, Clark County farmer and Illinois Corn Growers Association vice president.

In an interview during the Illinois State Fair’s Ag Day, Guinnip, who also chairs the Illinois Nutrient Research and Education Council, said input cost concerns remain the No. 1 issue in farm country.

“The price of everything we buy to produce corn, soybeans and wheat, particularly nitrogen and phosphorous, are very unstable, and that has cut into the bottomline a great deal,” he said.

The average anhydrous ammonia price was $915.50 per ton in early August, 16% higher than that same time last year and 23% higher than August 2024, according to the U.S. Department of Agriculture.

Diammonium phosphate, or DAP, hit an average of $912.22 per ton in early August, 7% higher than 12 months ago and 24% above two years ago.

Potash prices remained in the $490 to $505 per ton range through 2026, a 2.5% increase from a year ago and up slightly from August 2024.

Sulfur prices jumped from less than $100 per ton two years ago to more than $200 per ton by the spring of 2025.

By the end of 2025, sulfur prices were over $400 per ton and recently exceeded $1,000 per ton due to the disruptions in the Middle East, an area that accounts for about 24% of global sulfur production. About half of the seaborne sulfur trade must be exported via the Strait of Hormuz.

Stacked on top of that on the expense side is increased diesel fuel costs. Mid-August diesel fuel prices averaged $5.19 per gallon, about 50% higher than they were at the same time in 2024 and 2025.

“It takes a lot of fuel to produce grain. It takes a lot of fuel to haul the grain, to move the grain on the semis and the barges, as well as for the farm tractors and the combines. It costs to dry the corn. So, fuel costs and energy costs are another thing that have skyrocketed,” Guinnip said.

“A lot of that is due to the economy in the world. Everyone’s aware of the situation and the Persian Gulf and how that has to do with the movement of some of the products. We still have the instability in the Ukraine and Russian situation.

“Steel prices for machinery production are high. We are in the cost-price squeeze right now.”

Fall Decisions

Prior to the spike in fertilizer prices last year, many farmers had already preordered and prepaid for their inputs helping them avoid the higher costs.

However, if the higher price trends continue into this fall, that is a concern when making fertilizer and crop decisions for the next crop.

Guinnip recently met with a representative at a cooperative where he purchases fertilizer who told him they were “waiting on prices.”

“There will be a lot of uncertainty following soybean harvest, a lot of the dry fertilizer for the next year’s corn crop is going to go on and we’re trying to make the plans,” he noted.

“My salesman said, ‘A lot of my customers, a lot of my farmers are just uncertain if they’re going to put on the fall fertilizer and how much they’re going to put on.’

“In our part of the world, we’re thinking about planting wheat. Soybeans come off in late September, and the wheat crop goes in. How much wheat am I going to plant? Am I going to forego wheat and just plant corn and soybeans? What fertilizer do I need? There are all these things that go into planning ahead is beginning now.

“So, the uncertainty in the fertilizer market, the fuel market, all these things, they fit right in to making that decision, and that uncertainty that we had this spring is still there.”

Year-Round E15

The U.S. House passed a bill for the sale of year-round E15 separate from its farm bill that was passed a few weeks earlier. There’s a year-round E15 provision in the Senate’s farm bill that has yet to be considered by the full floor.

“The Senate farm bill stalled in Washington for reasons that don’t have anything to do with commodity prices. Its stall was about Supplemental Nutrition Assistance Program and how it’s administered,” Guinnip said.

“E15 will be a big boost, but it’s not going to happen immediately because we have to reprogram and rebuild some of the infrastructure systems the gas stations and distributors have to get ready for this. It will have a lot of benefits in the end, but it’s going to take time,” he said.

“E15 has been frustrating. It’s just been a long time coming.”

Inheritance Tax

Agriculture groups continue to push for estate tax reforms in Illinois. Under current state law, taxes must be paid on the entire estate if it’s valued above a $4 million threshold.

The Family Farm Preservation Act that was on the table this past General Assembly session, but not passed in the legislature, would raise Illinois’ estate tax exemption to $6 million.

“The governor now is considering that we need to get the inheritance tax law in Illinois that we’ve proposed, and he’s saying it needs to be done in the veto session. I’m thinking it’s gonna move. He and the legislators are up for reelection, and if they want to do this on an election year and give us a timetable, then you really think that’s positive,” Guinnip said.

“There’s a lot of good things going on, but down home on the farm, in the cornfield, a lot of issues are still there to be resolved.

“We’ve always been cyclical in agriculture. We’ve had ups and downs, and we’re kind of in a down cycle now, but we hope to get out of that, and just tighten the belt, and some of these assistance programs may tide people over and satisfy their bankers.”

Looking Ahead

“There’s a lot of positive things — having a good harvest, having something to sell, having crop in the bin to get you through the winter,” Guinnip said.

“That’s a positive thing, but then we’ve got to make some really hard decisions about how much of this and that input can I really afford to put out there. What crop mix do I want to have? Do I want to stay with my rotation?

“We need to do some planning, we need to have some conversations, and as you make commitments for fertilizer, many of the seed companies will be coming around in the next six weeks, wanting preorders. Many of them give you a considerable discount if you prepay in October, November, and a lot of us have done that for years. The decisions get moved ahead farther and farther all the time.

“So, yeah, I want to buy that corn and, yeah, I want the 10% discount, but I’ve got to come up with the cash by Nov. 15 or Dec. 1. We don’t always think that we’re so far ahead, but we’re way out and doing the next thing.”

State Fair Ag Day

The Illinois State Fair’s Agriculture Day on Aug. 14 drew farmers from every corner of the state, including farm and commodity group leaders, and future leaders in FFA and 4-H.

“It’s just nice to be at the fair. It’s nice to see all the young people here, seeing these FFA jackets and all the 4-H kids with their projects. That’s the future. That’s why all of us are involved in these groups,” Guinnip said.

“That’s why we do it, because we want them to have the same opportunities that we have, and maybe leave it a little better.”