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Farmers getting precise to trim fertilizer needs

Agriculture.com Staff 01/30/2009 @ 9:05am

Not too long ago, fertilizer prices were high. So were grain prices. Now that the latter sector's seen a decline, so is fertilizer.

Much of the fertilizer price fall has been based on declining farmer demand, says University of Illinois ag economist Gary Schnitkey. Retailers estimate demand declines between 20% and 50% last fall, something that was compounded by a later-than-normal harvest in much of the Corn Belt.

"As a result, there are large amounts of unsold fertilizer in inventory," Schnitkey says.

This trend -- which hasn't hit the retail level yet -- is likely to affect acreage decisions this spring, he adds. " In general, lower fertilizer prices increase corn profitability relative to soybean profitability, thereby providing farmers with incentives to plant more corn," Schnitkey says. "This is particularly true of reductions in nitrogen fertilizer prices, as nitrogen is needed on corn and not on soybeans."

But, the reduced farmer demand isn't just happening because of a sea change in acres away from corn. Some farmers say they're sticking to their normal crop rotations, only streamlining fertilizer needs by keeping a closer eye on nutrient needs through precision tools in the field.

"I am concentrating on the nutrients my soil tests and tissue tests say I am lacking and trying to budget my money very wisely," says Agriculture Online Crop Talk member hymark. "I have got to spend the money where I will get the return I need."

hymark offers his thoughts in responding to an Agriculture Online poll asking "Are fertilizer prices making you rethink your program?" Results indicate farmers are largely split on how they'll approach their program in view of current prices: 22% say they, like hymark, will apply maintenance rates based on soil tests, while 25% say they'll skip phosphorous and lime applications altogether and stick with "minimal N." Twenty-five percent say they have yet to decide and are taking a "wait-and-see" approach.

"[I think I am going to] put off fertilizer purchases until late. I think there will be enough and maybe prices will come down," adds Crop Talk member Jim Meade / Iowa City. "I've never been any good at doing any of the various N tests. I probably should try them one year to see if they affect my management decisions."

This approach has worked well for Farmers for the Future social network member dale a. Brandt. He says he knows his supplier has "filled his buildings with the expensive stuff," but he's looking at dramatically cutting his fertilizer needs in '09. Precision technology's made that possible.

"I just got my soil tests back. That is my proactive way of dealing with the prices," he says. "I had the entire farm GPS grid sampled and had surprising results. I am enrolled in the [Conservation Security Program] so my fertility levels need to be brought down. That's hard to do when we had drought for two years before this bumper crop. The obvious answer is to mine that fertilizer out."

And, there's a bonus for dale a. Brandt: He leases ground on a crop share basis, so it's helping him return higher numbers to his landowner. "The landlord will also benefit from me not buying that much fertilizer," he says.

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Not too long ago, fertilizer prices were high. So were grain prices. Now that the latter sector's seen a decline, so is fertilizer.

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