The seven most expensive words in agriculture are “I have always done it that way.” This is ever so true with increased fertilizer prices facing producers this coming production year. While the high fertilizer prices in articles are often blamed on the greed of fertilizer manufacturers, these same articles also often conveniently omit any conversation on supply and demand. If producers continue to buy fertilizer at the same or greater rate as when prices are low, this is a signal that the market can and will bear the increased input cost. If the fertilizer prices get to a point where producers cut back and purchase less, this will reduce demand and put downward pressure on prices. At that point market prices should stabilize or decline. From ALGL agronomist conversions with clients, prices have hit the point in which producers are starting to ask about wisely reducing fertilizer application rates.
Old habits are hard to break, but with current fertilizer prices it is an ideal time to break with tradition and look to what opportunities there are to decrease the fertilizer budget while maintaining profitability. Yes, focusing on max profits and not max yield. This may require that producers manage their fertility different than they have in the past. Also, changes do not have to be wholesales across the operation, a change on a portion of the operation may have big impacts. This might be the time to try a new practice that has been of interest. Either way focusing on greater nutrient utilization is key.
Some effective ways to reduce fertilizer costs while maintaining profitability.
Times of high fertilizer process like this are why it is best to focus on building soil test levels of P and K (where applicable) and building soil organic matter when you can. Maintaining good soil fertility provides flexibility to reduce nutrient application in challenging times. Those acres with limited fertility are at the greatest risk of poor profitability this coming growing season. Your ALGL regional agronomist is ready to help you with any questions you may have.
Here are some great resources to dig deeper into these concepts:
Helms, Alex, "Effect of Potassium Fertilizer in a No-Till Corn and Soybean Rotation with very low Soil Test Potassium" (2021). Creative Components. 854. https://lib.dr.iastate.edu/creativecomponents/854
Camberato, J. Using Phosphorus and Potassium Fertilizers Wisely. (2021). Purdue Univ. Dept. Agronomy Soil Fertility Update. https://thekernel.info/wp-content/uploads/2021/10/Using-P-and-K-wisely-finalrev.pdf
Camberato, J., B. Nielsen, D. Quinn. Nitrogen Management Guidelines for Corn in Indiana. (2021). Purdue Univ. Dept. Agronomy Soil Fertility Update. https://thekernel.info/wp-content/uploads/2021/10/NitrogenMgmt.pdf
By Gary Schnitkey, Nick Paulson, and Krista Swanson, Department of Agricultural and Consumer Economics, University of Illinois, and Carl Zulauf, Department of Agricultural, Environmental and Development Economics, Ohio State University. Management Decisions Relative to High Nitrogen Prices. (2021). FarmDocDaily. https://farmdocdaily.illinois.edu/2021/10/management-decisions-relative-to-high-nitrogen-fertilizer-prices.html.
Lory, John, “Managing Potassium and Phosphorus When Prices Are High”. (2021). University of Missouri Extension. https://extension.missouri.edu/news/managing-potassium-and-phosphorus-when-prices-are-high-5411.