The Seven Most Expensive Words in Agriculture – Fertilizer Prices

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.

• Correct soil pH to ensure maximum nutrient availability
• Focus fertilizer rates to maximum financial return rather than maximum yield
• Utilize yield maps to better represent crop removal rather than field averages
• Band phosphorus in fields with low phosphorus levels
• Subsurface fertilizer placement
• Side dress or utilize late season N application, when possible, to increase nitrogen use efficiency
• Add fertigation to irrigation equipment
• Use nitrogen modeling in conjunction with in-season ammonium and nitrate testing to dial in nitrogen rates
• Utilize manures when ever possible
• Apply sulfur to increase nitrogen use efficiency in all crops
• Utilize tissue testing to keep a watchful eye on crop nutritional needs
• Based crop removal on actual yields not projected yields or inflated yield goals
• Focus on annual applications of P and K rather than multi-year spreads.
• Rather than applying N for a maximum yield, focus on maximum returns
• Forgo building soil test levels, maybe only apply crop removal or a reduced build rate
• If you must go below crop removal, focus on fields with the highest fertility levels.
• If you must go below crop removal, cut phosphorus rates before potassium, potassium levels tend to decrease in soil test faster than phosphorus
• Soil test more frequently or at a greater density

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.