While fertilizer prices continue to increase, the rate of increase is slowing. It appears that the fertilizer prices are starting to stabilize. The price spike was largely due to supply shortages, supply chain disruptions, and higher producer demand following increasing commodity prices leading to more favorable farm income. While the prices are stabilizing at a higher level, many growers are looking to retain some of the increased revenues from improved grain prices. This is driving producers to evaluate fertilizer cost reduction strategies.
The second, and maybe bigger issue is the fact that the supply side of the equation has not changed and maybe growing tighter. While making plans to reduce fertilizer cost, producers also need to be making contingency plans if they cannot source enough fertilizer to meet their needs.
The strategies used in this situation will be very similar to those used when commodity prices are low but having a “Plan B” in the event that fertilizer is limited will be a new concept to look at. The first goal is to ensure that yield is not put at risk if possible, and the strategy will vary by nutrient.
All forms of nitrogen have about doubled in price in the last year. Concerns over anhydrous ammonium supplies have been minor, however dramatic increases in urea and UAN demand have greatly reduced the stock of these products in the field. The positive is that the high prices are delaying inventory purchasing to allow the supply chain inventory to refill. Flexibility in nitrogen source maybe key in the event one of the main materials supply declines.
Look for greater nitrogen use efficiency:
One of the greatest challenges in building phosphorus soil test levels is that it takes several pounds of phosphorus to raise a soil test 1 ppm, this is also an advantage in that it takes quite bit of crop removal to decline soil test levels. First separate your maintenance (crop removal) fertilizer rate from your build rates. The build rates can be reduced or eliminated if needed. Maybe prioritize the build on those fields with the lowest soil test values to make sure the build process continues.
If you’re not taking advantage of a precision ag based fertility program, know is the time to start. Putting the fertilizer where it is needed will pay in these challenging times. If you are in a program, take it the next level and add yield monitor crop removal. Replace only what the crop removes. In the events of very tight supply/cost and with good phosphorus levels, this technology could be used to apply less than crop removal on a percentage basis for a growing season or two with less negative impact than other nutrients.
Potassium soil test levels can change quickly, and it is not recommended to apply less then crop removal if the soil test levels are at or below targeted levels. Like phosphorus, build portions of fertilizer recommendations could be omitted. This again is a key advantage of a precision ag fertility programs with more frequent sampling cycle to keep current on soil test potassium levels.
Some research suggests that annual application of potassium fertilizers can increase yield. This reduces the volume needed to complete the fertility plan and reduces the price risk of buying fertilizer at the highest price for an extended crop rotation. If you traditionally apply your fertilizer in the fall, you many look into the logistics of spreading some or all of your potash in the spring in the event fall supplies are short.
If you have any questions on how various management decisions may impact soil and plant fertility, be sure to reach out to your ALGL agronomist sales representative.