Competing for the acre

A framework for crop inputs

Feb 08, 2025

Welcome to Topsoil – a monthly newsletter with frameworks to help you make sense of agriculture, at just the right depth.

A couple things before we get into crop inputs. First, I was delighted to join Tim and Tyler Nuss on the Modern Acre podcast to talk about last month’s edition on crop prices. We get into tariffs and the pumpkinpocalypse on their farm. You can listen here.

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Last month, we talked about commodity prices – prices are low and farmers are tightening the belt.

That means cutting back on expenses, including dollars spent on crop inputs like seed, fertilizer, and crop protection. However, even in lean years, corn and soybean farmers still spend around 25% to 40% of their budget on inputs.

It’s no surprise that this is big business for the few companies selling inputs – generating billions of dollars every single year. At the same time, forces are reshaping the status quo, like the need to reckon with downstream effects of inputs beyond the farm gate and good old innovation.

Today, we’ll cover the here and now of inputs: what they are, how they are sold, and how they fit together on the acre.

Let’s dig in!

What are “inputs”?

There’s a joke I’ve heard a few farmers make. If they only just purchased every product that was offered to them, each promising 10 bushels here, a handful of bushels there – then they would be growing 400 bushel corn. Easy!

Disappointingly, reality does not work that way (the average yield is closer to 200 bushels per acre).

There are indeed many different inputs offered to farmers, but you can think of them falling into three main categories: seed, crop protection, and fertilizer.

Seed

Seed selection is arguably the most important choice that a farmer makes when it comes to inputs. Advancements in seeds are responsible for about 70% of the yield gain in the last 100 years, which may be why seed brands command the highest loyalty:

Source: Purdue 2021 Large Commercial Producer Survey

Within each crop, farmers select seed varieties based on productivity, adaptability to a region, susceptibility to disease, and a whole host of other factors. For many commodity row crop farmers, the herbicide tolerance (HT) trait package is also an important choice – whether a particular variety can be sprayed with glyphosate, glufosinate, 2-4D, dicamba, or another herbicide to kill surrounding weeds without killing the crop. In this way, the seed decision heavily informs a farmer’s crop protection choices.

Crop Protection

“Crop Protection” is industry parlance for “the stuff that kills things before they kill your crop.” This category includes all the “-cides”: herbicides, insecticides, fungicides, and nematicides that kill or prevent the weeds, pests and diseases that can harm yield. Other products, like plant growth regulators and seed treatments fit in this category too.

Crop protection products are defined by their “active ingredient”, whether that is a chemical molecule, peptide, protein, or biological organism – the thing that makes the product work. Other ingredients, like adjuvants, are often added to make the product mix, stick, spread, and otherwise work better.

Crop protection can be applied in many different ways: on the plant leaves, in-furrow or in the planter box at planting, in a seed coating, or incorporated in the soil. Every product has a regulated label that spells out how the product can be used. It’s not like the label on your shampoo bottle where “lather, rinse, repeat” is a gentle suggestion – it is actually a federal offense to use crop protection without following the label.

Fertilizer

For every acre of land that produces 200 bushels of corn grain at harvest, 11,200 pounds of starch, protein, oil, fiber and water are whisked away to feed livestock and make ethanol. Corn plants are remarkable in being able to transform sunlight, water, and nutrients in the soil into that much output.

Nitrogen (N), phosphorus (P), potassium (K) are the main nutrients that a crop needs. Other nutrients, like lime and micronutrients also support plant health and yield. Most of the nitrogen used in production agriculture is manufactured from a mixture of natural gas and air. P and K are processed from minerals mined around the world. Livestock manure is also used to feed the crop.

There are many ways that farmers decide on their fertilizer strategy. Calculators, models, and mathematical formulas abound to take in soil sampling and yield data while considering the unique attributes of the field. The “4Rs” of Right Source, Right Rate, Right Time, and Right Place is a common framework to dial-in fertilizer applications.

For crops that are planted in the spring, nitrogen fertilizer can be applied in the previous fall (roughly a third of fields in an Illinois study) or in the spring either before planting or after planting in a “side-dress” application. Fertilizer can take the form of a gas that’s injected into the ground, liquid, or solid granules.

Other Inputs

Water, labor, equipment, and land are all also needed to produce a crop, but we’re going to focus today on crop inputs that are manufactured, purchased, and used up every year. It is also important to note that farmers rely on agronomic practices beyond purchasing inputs, like crop rotations, tillage or no-till, cover cropping, and more to drive yield and reduce crop stress.

No “Amazon” for agriculture

Typically the farm owner, with input from their agronomist, makes the final call on which inputs to buy. These are, after all, million dollar decisions with big implications!

Farmers typically buy inputs from a retailer, or in some cases, from the manufacturer that has a dedicated sales team. Beyond having product when the farmer needs it, the retailer provides advice and offers services to apply the inputs for the farmer. Retailers have the infrastructure to handle, store and move bulky, large amounts of seeds and chemicals. Colloquially called “the channel,” any input company that wants to reach the farmer must plan very thoughtfully how to work with the retailers that sell and distribute to the farmer.

Many farmers rely on financing to afford inputs when they need them. Remember that cash flows in farming are lumpy (crops are harvested only once per year), so credit and operating loans are critical.

While there was an uptick in online purchases of crop inputs during the pandemic, online purchases represent about only 10% of the total. One-click shopping isn’t yet the reality in 2025 for crop inputs.

Beyond dollars and cents

With tightened purse strings, farmers are taking an even more critical eye to their input purchases. Like any shopper, farmers consider cost in dollars as well as the time and effort that an input takes to handle and apply.

Farmers also carefully consider how any given product will work for their farm – if the product will play nicely with their specific soil and environment, and existing practices and products that they already use. For that reason, it’s common practice to try out an input on a portion of a field, and then scale up to a few fields, before extending across the farm if appropriate. As you might imagine, this process takes years.

Like a GRWM video (“get ready with me” makeup tutorial videos for the uninitiated), you may be wondering – I have only one face, how can I possibly apply 27 different cosmetics? Farmers typically grow one, maybe two, crops per season – how do all these different inputs possibly fit in the same field?

Below is a example of a typical corn season progressing from left to right over time, and what the input applications might look like throughout the year:

From left to right, corn growth stages are represented from planting to VE, V1, V6, V12, R3, and R6. Common input applications shown around each growth stage. This is for demonstration purposes only and is not agronomic advice – always follow labels, etc. etc.!

You will notice the very busy left-hand side of the graphic in the earliest part of the season. In his insightful newsletter Upstream Ag Insights, Shane Thomas describes this as a battle for “real estate.” Many companies want to get their products applied earlier in the season to lock in sales before there is room for plans to change.

Better living through…chemistry?

Many of the advancements in crop inputs, like manufacturing ammonia efficiently, are borne out of pre-WWI technology repurposed for agriculture. These advancements have increased yield per acre to incredible highs.

But these gains are not without cost. Pollution of waterways and drinking water from overapplication of fertilizer, herbicide resistant weeds, toxicity to humans and wildlife, and the erosion of farmer profitability are just a few of the challenges. In a 2020 survey of Iowa farmers, nearly 60% agreed with the statement, “I feel overly dependent on purchased inputs."

The reigning paradigm of solving agronomic problems with chemistry-based inputs dominates today, but there is growing appetite from farmers and consumers for new paths forward. Especially as the rate of new product development in chemistry has slowed, there is need for innovation from other corners. Better living through chemistry, yes, but also through harnessing biology, hardware and software (precision agriculture), or changes in management practices.

We will be back next month to talk biologicals. Thank you for reading!

Topsoil is handcrafted just for you by Ariel Patton. Complete sources can be found here. All views expressed and any errors in this newsletter are my own.

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