Reviewing Fertilizer Needs

Last Friday, Venance Msigala, the CMSO staff Agronomist and Gedion Chusi, the Intern Agronomist , spent much of the day reviewing the forecast of demand from each of the villages for fertilizer and other farm inputs in preparation for our meetings with suppliers.  The forecast for fertilizer from the individual AMCOS organizations could be more than 500 metric tons, or 10,000 bags of fertilizer at 50 Kg per bag.   

Over the weekend, we met a local dairy farmer who also had large fields of maize.  He told us that because the price of maize had recently dropped so low, he had decided not to plant maize this year, and instead, at the current low prices, he would buy maize feed for his cows from other local farmers.

The current price of maize in Iringa is TSH 330/Kg.  (TSH = Tanzanian Shillings, $1.00 = TSH 2,260)  This is equivalent to a price of $3.72 per bushel.  The current price of corn in the U.S. is $3.91.  So the prices between Corn in the U.S. and Maize in Tanzania are not that different. 

However in comparison, the price of maize as recently as April 2017 was TSH 1200/Kg.  This is the equivalence to $13.52 per bushel.  By comparison, the highest price for corn in the U.S. over the past 40 years was $8.25 in 2012.

 When the price of maize was TSH 1200/Kg.  The impact for farmers was very positive for those with maize to sell on the market. However, small holder farmers consume a large portion of their crop of maize.  For consumers, the price was very negative, since maize is a primary source of food in Tanzania.  In response to an outcry from consumers, and in an effort to contain inflation, the Government placed an export ban on unprocessed grains in June 2017.  In November 2017, the export ban was lifted, but prices have continued to fall to the present level. 

At current prices, maize production should be profitable, both with the expenses of the use of hybrid seed and fertilizer or without the use of hybrid seed and fertilizer.  However it will not be nearly as profitable as a year earlier.

We met with Dionis Tshonde, the local agronomist and sales representative for Yara Fertilizer on Monday, June 18.  He reviewed with us the fertilizer program that Yara had for farmers of Maize, based on soil type. He also reviewed the pricing for Iringa Hope Joint AMCOS, based on our projected demand.  Based on our forecast of a demand of 500 metric tons, we could present more demand than YARA’s largest distributor, and we could be the largest fertilizer customer in the Iringa area. 

Based on the typical expected yield of maize in most farmer’s fields, the level of expected depleted nutrients based on continuous corn crops, and very low levels of 1% organic matter in the soil, Tshonde recommended application of three 50Kg bags of YaraMila Cereal fertilizer.  Yara recommends this fertilizer for cereal crops needing nutrient elements.  Two bags should be applied at planting and one bag applied later as side dressing.  Without adding nutrients to the depleted soil, the maize crop is rather sparse.  With these enhancements our members yields are very similar to those in the US.  (The illustration below shows what happens when maize is grown with various soil deficiencies.  We have observed these problems in the maize that has already been harvested.))  

 We will begin negotiations with Yara management for final prices, based on our demand forecast.