GROWERS FACE the ever-challenging task of managing outputs while maximizing their income. And as fertilizer costs continue to climb, the task becomes more daunting.
Fertilizer prices are about 15% above last year's prices. Potash and phosphate showed the sharpest price increase, up 26%. Cost of mixed fertilizers was up 11%, while nitrogen cost increased 17%, according to the USDA.
Larry Murphy, president of the Fluid Fertilizer Foundation, explains that three factors are contributing to higher prices: increased natural gas costs, an increased world demand and an increased ability to purchase raw materials.
Natural gas prices directly correlate with nitrogen prices; therefore, as natural gas prices have climbed, so have nitrogen prices. The higher prices have affected production, cutting into supply, Murphy says.
International demand is driving up the prices of phosphorous and potash.
“There's not much that can be done about it in the short term, but eventually prices will moderate,” Murphy says. Changes in supply around the world will affect available supply and prices. For example, China is becoming more self-sufficient as a fertilizer manufacturer and exporter. Of its phosphorus production, 15%, will be exported. Those exports will ultimately force North American prices down, and they might also force a change in availability.
In the interim, growers still have options to help manage fertilizer costs. Some growers are switching to no-till and strip-till or planting more soybeans and sunflowers to help alleviate the pressures of the price hike.
Murphy believes that growers can manage fertilizer costs most effectively through efficient nitrogen application. “For instance, you see the best results when liquid fertilizers can be applied in contact with the soil or subsurface to get high concentration zones,” he says.
Growers in high-residue cropping systems also can manage fertilizer cost and improve their nitrogen efficiency with starter fertilizers. Murphy says a starter fertilizer should be a management decision up front, regardless of soil test values. Starter fertilizers can help overcome the early season stresses of cold, excess soil moisture and compaction. “It can really add bushels and ultimately dollars to the bottom line,” he says.
He adds that micronutrient management also can have a significant impact on efficiency of other nutrients, yields, and ultimately a grower's bottom line as dictated by production costs per bushel.
As growers face the challenge of higher fertilizer prices, they will cut back on fertilizer use, Murphy says. “Growers will start back up the line, first cutting off micronutrients, then sulfur, potash, phosphorous and finally they will just try to maintain their nitrogen,” he says. “They may get by with it for awhile, but it won't last forever.”