Solid commodity prices are being undercut by higher fertilizer prices, but the right plan will preserve margins
If you haven’t talked with your fertilizer dealer for a while, you may want to be seated when you ask about prices. They have been moving up quickly since fall.
For those of you who haven’t been able to put your fertilizer down last fall, take it into storage on-farm or pre-price it, this year is going to be a replay of 2008.
Remember $800 urea? Or $1,500 MAP phosphorus? We aren’t there yet, but recently I heard of urea trading at $650 and phosphorus around $950. And contacts in the fertilizer trade are telling me it is going higher.
The reason, simply put, the price of corn has increased. Over the years, there is a strong link with nitrogen and phosphate prices and the price of corn. We have seen corn prices increase over the past four to five months, and a corresponding increase in the price of fertilizers.
If you haven’t secured your fertilizer needs yet and are working on a somewhat fixed fertilizer budget, you need to ask yourself, “Where can I cut my fertilizer while doing the least amount of damage to my yields?”
Firstly, get a soil test done. Tests at zero to six inches and six to 24 inches will tell you what the status of your nutrients are and where you need them.
Now, look at what I call “the nice to haves” as opposed to “the need to haves.” These include the micro-nutrient blends that are promoted as “baby food” for your young plants. These blends usually contain a blend of micros in a certain ratio that is perfect for developing plants. They may be blended with some phosphate and potash.
Generally, if you are not deficient in a nutrient, they provide little, if any, yield response. Unless you see a glaring deficiency in one of the micros, and then only on the crops that are likely to show a yield response, park these products for this year.
There have been a number of studies done that show applications of micro-nutrients without diagnosed deficiencies seldom are economic.
Take the money you spend on these products and put them towards the Big Four — N, P, K and S.
Nitrogen, or N, is the biggie of the Big Four. It accounts for 80 to 90 percent of yield increases from fertilizers on non-leguminous crops. Nitrogen is not where I would start hacking. It is the most researched nutrient and we know that it pays the bills.
Not only does it produce more yield, but it also produces grains of higher quality, except maybe for malting barley. It commonly gives a return of four or six to one.
There is an excellent nitrogen rate of return calculator developed by Rigas Karamanos that can be found on the Manitoba Agriculture and Rural Development website at bit.ly/N-calculator. It shows that even with high nitrogen prices, the increased value of the commodities more than compensates.
The bottom line is that I would guess you are not putting on enough nitrogen to maximize your returns. So don’t drop your nitrogen rates.
Phosphate (P) is a bit of a conundrum. We know that phosphate is deficient in most fields across Western Canada. However, we also know that the phosphate-use efficiency is around 20 percent, so if you apply your phosphate at a crop removal level, 80 percent of the phosphate that is removed actually comes from previous years’ applications.
As well, the yield response from phosphate is much less than nitrogen to begin with.
In 2008, a number of growers decided not to purchase phosphate and didn’t see a great impact on their yields.
The majority of the impact of phosphate both on yield and maturity, occurs with the first 10 to 15 pounds. Incremental rates generally go into the soil bank to be used in subsequent years.
As a result, I would not recommend using zero phosphate, but remember that the reduced phosphate from this year must be replaced in subsequent years when prices return to a somewhat normal.
Also remember that it was in 2009 when some growers decided that removing phosphate from their blends didn’t seem to be a big issue so dropped it again. That was when we began to see deficiencies showing up and causing large yield losses. You should be preparing a phosphate balance table for every field, documenting the phosphate you apply and the phosphate you remove. Over a five- or 10-year period, you should be, at least, putting on as much as you remove.
Land tenure and phosphate fertilizer is always a point worth discussing. Because about 80 percent any P you apply this year will not be completely used by subsequent crops for 10 or more years, you may be fertilizing someone else’s crop. Reducing P applications on land on which you have shorter term rental agreements, one to three years, may make more sense than land you own or have longer term lease agreement.
Now let’s take a look at potash (K). The majority of soils in Western Canada test fairly high for levels of potash. The breaking point from high to marginally adequate is usually considered around 300 lb. of K20 per acre, about 150 parts per million. Soils above this level have a low probability of yield response. In barley, the most responsive crop, there is about a 20 percent chance of obtaining an economic yield response to an application of 25 pounds of K20 per acre. Below 300 lb. per acre or 150 ppm, applications should be applied as recommended on barley or on wheat. Broadleaf crops generally respond poorly to potassium unless deficient. Soils test below between 250 and 350 lb. per acre should be monitored closely and considered for barley.
Finally, there is sulphur (S). Growers have become used to applying it on all their crops. Sulphur is routinely applied as either elemental sulphur or ammonium sulphate, 21-0-0-24, or a combination of both or with ammonium thiosulphate.
Depending how much you apply over a four-year rotation, your soil texture, drainage and yields, you may be able to skip a year in a non-canola crop. If you have medium- to fine-textured soil and have been applying an average of 10 lb. per year, your levels are probably adequate to carry a cereal crop.
In their 2013 paper titled Sulphur Application does not Improve Wheat Yield and Protein Concentration, in the Canadian Journal of Soil Science, 93, 223-228, Rigas Karamanos, John Harapiak and Norm Flore showed no response to adding sulphur to hard red spring wheat. Sulphur is highly variable in some fields and it can be low enough in places to impair yields, even in wheat.
Consider that variable rate fertilization might make sense. Often times, I have found that redistributing your fertilizer can save you money and produce higher yields. Putting a scarce resource where you can get the best bang can help you spread your fertilizer dollar to where its payback is greater.
For example, phosphate is usually most deficient on the tops of those knolls we see in areas where glacial till is farmed, the majority of Western Canada.
You could take advantage of variable rate application there, putting on the normal rates of phosphate and then cutting back in other areas of the field.
There may be places that you can cut short-term in your fertilizer practices.
First step is to get soil tests.
This is a cheap investment, relatively speaking, with nutrient prices sky-high.
Then consider luxury-products that contain a broad spectrum of micro-nutrients. Potash would be the next nutrient to look at. If you have soils with potassium levels above 300 lb. of K20 per acre, 150 ppm, consider removing it from your blends.
Phosphate rates can be reduced, but not eliminated. A minimum of 10 to 15 lb. of P2O5 should always be applied to give a pop-up effect to crops. Consider your land tenure situation to decide which fields to start cutting the rate but remember, phosphate is a long-term game and product not applied this year will have to be replaced in subsequent years. Areas where a reduction on your phosphate rates could be considered include:
- high soil P
- history of continuous P use
- irrigated soils
Fields where reducing phosphate rates should not be initiated include:
- low soil P
- forage breaking or fallow
- limited history of P use
Sulphur should not be removed from a canola blend. You may consider reducing or eliminating sulphur from other crops unless you are farming in a light textured soil, have had a history of sulphur deficiencies or you have recently removed a forage crop from that piece of land.
When it comes to nitrogen, leave it alone. Take a look at the nitrogen rate of return calculator and see where you sit. You actually may want to add more this year, considering the high commodity prices.
Talk with a variable rate provider. Explain what your issues are with high fertilizer inputs and ask if they could develop a plan to meet your goals.
Hopefully, these recommendations will allow you to stick handle through this period of high fertilizer prices.
Thom Weir PAg is a certified crop advisor and professional agrologist in the Yorkton, Sask., region. You can reach him at firstname.lastname@example.org.