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Cutting Soil Testing to Save $? Don't Do It, Experts Say

Cost containment is all the rage this fall heading into a winter when grain prices aren't likely to light the world on fire.

Farm expenses like land, fertilizer, fuel, chemical, and seed are all likely candidates for penny-pinching moves in an effort to preserve a grain farm's bottom line. Just don't cut your soil testing budget this year as part of that effort, experts advise.

Good soil profile information gleaned from accurate, comprehensive testing has value well beyond the next year and has long-lasting implications for other crop expenses like fertilizer. That makes it important to resist the urge to cut back on your soil testing budget, according to a recent report from Kansas State University Extension nutrient management specialist Dorivar Ruiz Diaz and ag economist Mykel Taylor.

"Fall after harvest is an excellent time for soil sampling and testing. This year, with lower grain prices, many producers may be looking for places to cut costs. However, cutting back on soil testing could result in lowering profits," according to Diaz and Taylor. "Having accurate soil test information is critical to making the right decisions regarding fertilizer input. Fertilizer cost has remained steady while grain prices have dropped this fall. Therefore, making good use of fertilizer input becomes critical to maximize profits."

What does "good use of fertilizer" mean exactly? The short answer is something completely different today, with corn in the $3- to $4-per-bushel range, than it was when corn was worth twice as much. Fertilizer is part of a group of crop inputs -- along with seed and chemical -- that makes up about 20% of the total cost to raise a crop. With fertilizer prices being relatively stable, a treatment decision based on higher corn prices may not make sense now, says Tina Barrett, executive director of Nebraska Farm Business Inc.

"Consider the application of extra fertilizer costing $20 per acre. The extra fertilizer should give you a yield boost of 5 bushels per acre. If corn is worth $7 per bushel, those extra 5 bushels are worth $35 per acre, and the fertilizer has made you a net increase of $15 per acre," she says. "If corn is worth $3.50 per acre, those 5 bushels are worth $17.50, and the extra fertilizer has cost you $2.50 per acre. Also, the 5-bushel yield increase is under ideal conditions; if you only get a 4-bushel yield increase from the added fertilizer, the cost is $6.00 per acre."

In general, there are two schools of thought when it comes to fertilizer decisions; on one hand, there are those who believe in reining in fertilizer just as any other crop input even if it means a yield cut. Then there's the group who goes the other direction, keeping up application amounts or even bumping it to maximize yield potential and capture every dollar possible. While Barrett says the former school may be wiser than the latter in a time when grain prices are low, putting the focus on savings and overall net returns instead of the highest potential yields.

Yet, Diaz and Taylor contend you may be able to have this cake and eat it too. Better soil testing can reveal more accurate fertilizer recommendations, and those may not always lead to application amounts higher than originally planned.

"Considering other variables such as fertilizer and grain price, results show that returns to soil sampling are generally greater when grain prices are lower. This is because potential returns to inputs are tighter at lower crop prices. If actual soil test levels of N or P are higher than what you expect, producers can realize a significant savings by reducing or eliminating unnecessary nutrient applications. This situation is not uncommon for N, where some fields may have high levels of residual N from previous crops," they say in a university report. "On the other hand, if producers overestimate how much N or P is in the soil and actual soil test levels are much lower than expected, yields and income could be increased by applying the higher, correct amount of nutrients needed. In this case, the difference in final income per acre will depend on the cost of the needed nutrients, the yield response from applying the needed nutrients, and crop prices."

The more comprehensive and specific you are with your soil sampling, the better your chances will be of getting the most out of not just every acre, but every square foot.

"If producers are applying a 'farm-wide' uniform rate, they may be missing the opportunity to maximize profits for each field," The K-State specialists say in a university report. "Furthermore, by sampling and fertilizing based on management zones within a field, or based on historical yield map data, producers can further increase the return per area."

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