11:26 UK, 8th February 2011, by Agrimoney.com
Corn growers' profits to top $200 an acre

America's corn farmers are, for a second successive year, to reap profits of more than $200 an acre, creating fertile ground for shares in nutrient groups, Credit Suisse has said.

The bank, in a note foreseeing "limited downside risk" to shares in fertilizer groups, pegged corn farmers out-earning peers in soybeans and wheat this year, with a profit of more than $205 an acre.

The estimate - which comes as US growers are weighing up options for spring sowings, a process widely expected to favour increased corn area – would put profits in line with last year's $206.70 per acre, a figure huge by historical estimates.

In 2008, the best year of the last rally in grain prices, profits reached $101.10 an acre, with corn famers suffering at least nine years in the red in a losing streak which ended in 2006.

Corn growers' losses from 1997 to 2005 totalled $678m on Credit Suisse estimates, which for this year factor in December futures prices.

'Bullish price environment' 

Grower profitability is being helped by a lag in the recovery markets behind that in farm commodities.

Credit Suisse forecasts for US farmers' profitability, 2011

Corn: $205.60 per acre

Soybeans: $169 per acre

Wheat: $49 per acre

Estimates based off prices of December 2011 futures for grains and November 2011 futures for soybeans
Prices of potash, for instance, are still 45% behind average levels for 2008, while those for soybeans are 16% ahead, and for corn up 20%.

while those for soybeans are 16% ahead, and for corn up 20%.

However, with phosphate prices back on their way above $500 a tonne this year, and potash hitting that level in 2012, including freight, on Credit Suisse estimates, the "bullish price environment should support" sector shares.