The survey was conducted at the beginning of the month, which was after the war in the Middle East began at the end of February.

Given that planting is just around the corner in the corn belt, most farmers were likely very aware of higher fertilizer prices and their impact on crop profitability.

Farmers have decided to plant fewer acres to crops this year.

Total area planted in 2026 is forecast to reach 310 million acres, which is down from the 312 million acres planted last year.

This is one of the ways that farmers are coping with the higher input costs this year. They are also devoting a larger area to crops that require less nitrogen fertilizer.

Soybean area is forecast to increase by four per cent to 84.7 million acres. The total area increase was 2.85 million acres, with the bulk of the gains reported in the corn belt and Delta states.

Corn area was obviously replaced in the corn belt, while the Delta (Mississippi) increase came from lower cotton area.

Canola area in the northern Plains increased by 347,000 acres to 2.69 million acres despite high fertilizer costs. This mirrors the increase in canola area expected in Canada.

Corn area dropped by 3.4 million acres (three per cent) from last year to 95.4 million acres. Lower intended corn area came mostly from the corn belt states, but also from reductions in the northern Plains and Delta region.

The U.S. wheat area dropped to the smallest since 1919 at 43.8 million acres.

The area drop was caused by a two per cent reduction in winter wheat area, while spring wheat dropped by six per cent from last year.

The drop in winter wheat was down from the first survey done in December. Winter wheat is expected to fall to 32.4 million acres. Hard red winter wheat area was pegged at 23.1 million acres.

The drop in spring wheat area was expected due to the lower prices and higher input costs.

The largest spring wheat area reduction occurred in Minnesota (down 10 per cent) and North Dakota (down 13 per cent), while Montana’s area remained unchanged from last year. South Dakota reported a drop of only four per cent.

The hard red spring wheat area is currently the lowest since records on the class began in the 1980s.

Durum acres are down by 11 per cent to 1.95 million acres in the report. This area is lower than the past two years, but still above the 2019-23 period.

The drop in durum acreage was not unexpected because prices have dropped by US50 to 75 cents per bushel from last year.

The drop in spring wheat and durum in the United States mirrors the situation in Canada. The Statistics Canada report in early March also pointed to a decline in both wheat and durum area this year.

The one difference between the two countries is that the total wheat area (wheat and durum) in Canada has remained relatively stable over the past 10 years, while the U.S. continues to experience a decline in area.

This trend is expected to continue in the coming years as U.S. wheat area drops while Canadian area remains relatively stable.

“Almost all the products you can purchase today have come off patent in the last 15 years,” Rob McClinton, head of North America for Fuhua Chemical, told delegates attending FBN’s recent Farmer2Farmer VII conference.

Fuhua is the second biggest glyphosate manufacturer in the world behind Bayer.

McClinton said the 25 top selling active ingredients in the world are all off patent. The last few products remaining on patent are coming off by the end of the decade.

That means more competition and lower prices for those products, he said.

For instance, up until last year, only FMC manufactured chlorantraniliprole, a popular insecticide. As of today, 23 companies in China are either manufacturing the product or gearing up to do so.

“That ultimately means prices at the farmgate come down,” he said.

Why it Matters: Farmers need a break when it comes to crop inputs.

Prothioconazole is one of the biggest active ingredients in the world. The fungicide, marketed as Proline by Bayer Crop Science in Canada, is now manufactured by eight companies.

Bayer was selling that product for almost US$500 per gallon until its patent expired in 2023. FBN is now selling it for $190 per gallon.

“Think of what that means for the economics of your farm,” said McClinton.

He doesn’t fault the big-five chemical companies for charging a premium while they had a monopoly because it takes an average of $300 million and 10 to 12 years to bring a new active ingredient to market.

Companies will screen 100,000 molecules to get one candidate, and half of the candidates fail before launch.

Patents last 20 years, including the 10 to 12 years it takes to bring the product to market, leaving companies with eight to 10 years to recoup their investment.

That is why no new active ingredients have been brought to market this decade. The next one is supposed to arrive in 2029.

McClinton said the big traditional players, such as Syngenta, Corteva AgriScience and UPL, have all blamed recent disappointing financial performance on increased competition from generics.

John Appel, vice-president of category management at FBN, said the crop protection business is in the midst of an industry shakeup.

Corteva has split itself in two. The crop protection side of the business is now an independent company called New Corteva, while the seed business has become SpinCo.

BASF Agricultural Solutions and Bayer Crop Science are pivoting from commodity chemistry toward biologicals, digital agriculture and high-value formulations.

BASF has a minority initial public offering planned for 2027. BASF will remain the majority shareholder in the company post-IPO.

Bayer is closing its Frankfurt production facility by the end of 2028 after a 161-year history at the site.

FMC’s board is considering a possible sale of the $3.47 billion business.

“They have really struggled with earnings and revenue over the past year,” said Appel.

McClinton said manufacturers of generics are also experiencing financial problems. Hebang, which is one of the largest in China, posted revenues of $8 billion for the first three quarters of 2025 but only $13 million in profit.

“Can you imagine a business that big where you’re making that little money?” he said.

That is because more than 700 manufacturers are producing active ingredients in China. The competition is fierce.

It used to be that 90 per cent of active ingredients were manufactured in the European Union and the United States. These days, 70 per cent of the production is in China.

There is enough chlorantraniliprole manufacturing capacity to meet 5.65 times the global demand for the product., enough glufosinate capacity to meet 3.17 times the demand and enough prothioconazole capacity to meet 2.05 times the demand.

That is good news for farmers because excess supply means lower prices.

McClinton said glyphosate prices are sitting at the floor of its price range right now.

That product has been off patent for so long it has weaned out a lot of suppliers. There are 15 manufacturers today, down from 30 in 2010.

However, the remaining companies still have 840,000 tonnes of capacity in China, which is more than the annual global demand for glyphosate.

He believes other products, such as chlorantraniliprole and prothioconazole, will follow the same pattern as glyphosate, setting continually lower and longer-lasting price floors in the coming years interrupted by the occasional price spike due to black swan events.

Glufosinate might be the one exception.

It could soon follow the pattern of 2,4-D, which has been off patent for a long time. Prices of 2,4-D have bottomed out and are now moving higher due to inflation and an anti-dumping duty on Chinese product.

BASF just closed its glufosinate manufacturing plant in Germany, so now all the production is occurring in China and India.

He believes some Chinese glufosinate producers are going to exit the market in the next little while.

The one downside for growers is that purchasing crop protection products is becoming more complicated due to the plethora of manufacturers and retailers.

Comparison shopping is becoming difficult. There was a time when glyphosate prices would be set once for the entire year. Those days are long gone.

“We literally change our price on glyphosate every day,” said McClinton.

“That’s how much prices move when things become commoditized.”

Farmers of today can get into financial trouble faster than previous generations due to increased costs. On bigger operations, farm losses can’t be subsidized by off-farm work like they could in prior decades.

Bigger numbers add complexity and risk to the farm budgeting process. Since tracking farm financials can be an onerous process, I’ve broken it down into seven digestible steps.

1. The land budget

The land budget is used by your lenders, agronomists, accountants and for crop insurance reporting. Owned and rented land should be separated, and any crop share arrangements should be highlighted and segregated.

A typical issue with land rent is whether GST is paid, and timing and method of payment.

Legal land descriptions, field names, cultivated acres and even land appraisal values are all good information to include as part of your land budgeting process.

Canada’s largest farmland owner, Robert Andjelic, disclosed on a recent webinar that he uses spreadsheets to manage his land holdings. You can as well.

2. The gross margin budget

Gross margin consists of yield multiplied by price less your input expenses (e.g., seed, fertilizer, chemical, crop insurance). Some nuances of the gross margin budget include accrual adjustments for prepaid inputs, chemical pricing and rebates, accounting for bin run seed, and late decisions regarding private insurance and fungicides.

The gross margin budget helps you determine profitability of different cropping options. Using AgriStability-vetted production data is the best source of historical yield data.

3. The capex (capital expense) budget

The capex budget determines your capital addition and replacement needs, and methods of financing.

Paying cash for machinery and other assets when there is money in the bank will show up later as eroded working capital.

The capital budget needs to consider machinery trade differences, revolving machinery loans and capitalizing betterments versus expensing normal repairs.

Capital asset continuity/depreciation schedules should be obtained from your chartered professional accountant (CPA) and reviewed for accuracy at least annually.

4. The labour budget

The labour budget includes employees and custom/contract workers on your farm. Consider payroll deductions and taxable benefits for employees.

This budget determines who, how, and when your employees and contract workers will be compensated.

I still consider a benchmark of 2,500–3,000 acres per full-time equivalent on a western Canadian grain farm. In other words, a husband-and-wife team could farm 5,000 acres with some seasonal help.

5. The opex (operating expense) budget

This is the “everything else” budget. Examples include machinery repairs, small tools and professional fees.

Machinery repairs are typically hard to budget and are usually a trade-off between running new machinery and older machines. Significant one-time repairs can sometimes skew results year to year.

Another nuance is fuel. A good way to approach this is to find the actual quantity used in the previous year and apply the price for the new year.

6. The debt schedule

The debt schedule consists of both a loan schedule and a lease schedule. The starting point is recording the timing and amount of your loan and lease payments. The debt schedule can be beefed up by including interest rates and lease buyout amounts and timing. Tracking principal payments allows you to break out principal from interest on blended payments.

Operating leases could be tracked with your opex budgeting. Capital leases, however, should be part of your debt schedule.

7. Owner compensation budget

Both the cost to farm and cost of living has increased recently. Personal budgeting is needed to determine how much you need to withdraw from the farm in the upcoming farm budgeting cycle — especially when the farm is the only source of income.

Accountants usually advise a mix of wages, dividends and custom work to compensate farm owners.

Some banks will include owner draws as part of their debt servicing calculation.

Putting it all together

Now you have the pieces for a rolling cash-flow forecast and accrual income statement. Providing these numbers to your lender early and often will set you apart as a proactive farm manager and lower-risk borrower. Periodically updating and reforecasting these numbers will give you better data to make decisions.

Craig Macfie, CPA, PAg provides fractional CFO services to growing farms and agribusinesses. Find out more at www.springcfo.com.

David Pupo, a fertilizer market analyst, said the urea market has turned decidedly bullish, and growers should consider “inching in” some of their needs.

Why it Matters: Fertilizer is the most expensive crop input for many farmers.

“The underlying trend is up,” he said during a webinar hosted by AGvisorPRO.

Urea prices have been volatile in 2025. They were bearish in the summer but recently found support due to a variety of factors.

The biggest one was China suddenly suspending urea exports on Oct. 15.

“This upsets the apple cart because India must find urea elsewhere,” said Pupo.

China’s ban could last six months or even longer.

“This is going to support global prices into 2026,” he said.

In the meantime, there has been solid demand from India due to good monsoon rains, falling domestic urea production and weak imports early in the year.

India’s urea inventory as of Aug. 1 was half of what it was at the same time in 2024.

Recent Indian tenders have been huge, involving millions of tonnes, and prices have been creeping higher.

A collection of Indian fertilizer companies announced they intend to build a urea manufacturing facility in Russia, leveraging the country’s cheap ammonia and natural gas supplies.

Europe’s Carbon Border Adjustment Mechanism, which kicks in Jan. 1, 2026, is another bullish factor.

It is essentially a carbon tax on imported fertilizer that will drive prices higher.

Brazil’s fertilizer demand continues to be strong despite shrinking farm margins due to the continued expansion of corn and soybean acres.

However, there has been some shifting of demand from urea to ammonium sulfate. The country’s imports of ammonium sulfate were up 59 per cent through the end of August compared to last year.

Nutrien announced Oct. 21 that it was beginning to shut down its nitrogen fertilizer operations in Trinidad due to issues with port access and a lack of reliable, economic natural gas supply in that country.

Urea spot prices in the United States jumped eight percent in response to the announcement.

A few days later, Trinidad struck an agreement with Nutrien, giving the company unrestricted port access through Dec. 31, 2025.

Pupo said nobody knows what Nutrien will do following that concession.

Pupo takes his cues from urea prices in New Orleans, which were up four per cent in October and 23 per cent year on year. Forward pricing in December and January are also climbing.

“The market is expecting strengthening prices today,” he said.

Bids in Saskatchewan range from $765 to $805 per tonne.

“Normally, we would see these prices either weakening or going sideways at this time of year, but we’re seeing these prices inch up every day lately,” said Pupo.

He believes prices have bottomed out, and there is a foundation that will support them through the first quarter of 2026.

However, he does not advise producers to lock up all their urea needs and put it in storage because anything can happen between now and March in this volatile market.

Terry Drabiuk, vice-president of business development with Genesis Fertilizers, provided a brief update of the $2.3 billion nitrogen fertilizer project planned for Belle Plaine, Sask.

The company is looking for government support and says it recently had a productive meeting with three Saskatchewan cabinet ministers.

The project is two-thirds of the way through the front-end engineering design process. It will emerge from that process with a far more detailed capital expenditure budget.

Drabiuk said Genesis is looking for a strategic partner, which could be a pension fund, gas company, grain company or technology provider.

Genesis recently signed a letter of intent with Gunvor USA, which would supply 100 per cent of the proposed plant’s natural gas needs.

It also signed agreements with Gunvor that gives the firm the right to purchase 100 per cent of the plant’s diesel exhaust fluid and up to 100 per cent of its carbon credits.

At only 24 inches wide, the robot is designed to travel between 30-inch corn rows in crops and apply in-season fertilizer. With a number of them working 24 hours a day in groups called swarms, they could cover a lot of acres.

“This guy’s name is Beethoven,” says Jana Tian, chief executive officer and cofounder of Upside Robotics, as she kneels beside the demonstration model in a field at Canada’s Outdoor Farm Show in Woodstock, Ontario in September.

“We designed it this year to essentially apply nitrogen on a continuous basis on corn fields and do many split applications. That way we can reduce a lot of fertilizer without impacting the yield. Because today with how it’s applied very early in the season, a lot gets washed away or vaporized. What we do is look at the crop needs and fertilize depending on that.

“A lot of things can change, the temperature or rainfall. So we change our algorithms depending on the external conditions and help plants get the nutrients they need when they need it.”

A group of these small robots working together is able to cover a large number of acres. The product tank in each unit holds 10 gallons (4.4 litres) of nitrogen. It sprays that through hoses on each side directly onto the corn rows.

Electrically driven, the battery can keep a unit running for about six hours with a short 40 minute recharge time.

The system could also be used to apply herbicides, fungicide or any product the crop needs, according to Tian.

“It can basically cover 100 acres in five days,” she says of each individual robot.

“So we do about a weekly application. It’s a very different model from how people are applying today. We don’t have to have a person inside (a tractor), we don’t have labour restrictions, so it does it as it needs to.”

The idea is reminiscent of the Xaver concept shown by Agco several years ago at Agritechnica in Germany. However, Xaver was designed to plant crops rather than fertilize them.

Beethoven was developed by Upside Robotics, which is a young start-up tech company based in Waterloo, Ont.

This was the first year the small robots were sent out into a field for trials. Next year, Tian says, the company hopes to have 25 to 50 of them out on farms conducting further paid trials.

“We had pay trials this year. We want to make sure we create a commercially viable product, something farmers really need.”

The company is still working on developing the recharge stations, which will allow each Beethoven to automatically return for a recharge and refill without operator input.

Tian says she’s heard from growers that they want to be able to reduce inputs, and that was a key factor in developing the autonomous concept. Also, she believes it can have significant environmental benefits by allowing farmers to reduce their carbon footprint while still growing the best possible crops.

“We found there was a huge need by farmers in Ontario to reduce input costs, so we created a solution based on what they wanted.

“That’s at the core of Upside Robotics, that’s why we named it. We want to have an upside for the planet, an upside for the growers and of course for everybody that has invested in this company.”