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Managing fertilizer costs on dairy operations

By Chris Zoller, Extension Educator, Agriculture and Natural Resources, Tuscarawas County; and Greg LaBarge, Field Specialist, Nutrient Management, Ohio State University Extension

Fertilizer prices have been increasing rapidly. The Agricultural Marketing Service (AMS) has tracked bi-weekly fertilizer prices in Illinois since 2008. Prices of anhydrous ammonia, urea, and 28% are all up. The average price of anhydrous ammonia was $1,135 per ton, up by $278 per ton from the price reported Oct. 7, 2021. 

The University of Illinois Farmdoc Daily, in their October 26 Weekly Farm Economicsnewsletter (https://farmdocdaily.illinois.edu/2021/10/management-decisions-relative-to-high-nitrogen-fertilizer-prices.html) identified the following reasons for increasing nitrogen fertilizer prices:

  • Hurricane Ida’s landfall in September closed anhydrous ammonia plants in Louisiana, leading to supply disruptions.
  • Natural gas prices, a significant cost of producing nitrogen fertilizers, have been increasing in recent months. Natural gas and anhydrous ammonia prices are correlated.
  • Corn prices have been rising. Fertilizer prices are positively correlated with corn prices, particularly since the rise in corn use for ethanol.
  • General supply disruptions and labor issues associated with the aftermath of COVID-19 that has impacted all industries also are impacting the fertilizer industry.

Spring 2022 price expectations

In their Weekly Farm Economics newsletter, the University of Illinois Farmdoc Daily reviewed price changes from October to April for the years 2008 to 2020. For anhydrous ammonia, 28% of the time the price was lower in April than in October. The largest decline ($441 per ton) occurred from 2008 to 2009, and the largest increase ($262 per ton) was realized between October 2020 to April 2021. Whether fertilizer prices will decline in 2022 is anybody’s guess. Manufacturing may increase, but uncertainties in winter heating or other delays can impact production and pricing.

Management considerations: Soil sampling and testing

Soil testing is always an important management consideration, but its importance is an even better investment with the present fertilizer pricing situation. Sampling is recommended every three years to maintain proper soil fertility and promote healthy plants. Soil testing is also critical for determining soil pH and the need for lime applications. A target soil pH of 6.0 to 6.8 is ideal for most crops.  

The Tri-State phosphorus and potassium recommendations define how vital the fertilizer application is in the upcoming year. Using the soil test value, we can answer the question, “Do I need to apply fertilizer this year, or can I wait into the future?” If your soil test value is above the critical level, added fertilizer is not expected to increase the yield of the upcoming crop. When soil test values are above the critical level, the chance of a yield response is highly unlikely. The critical phosphorus soil test level for corn and soybean is 20 ppm and 30 ppm for alfalfa and wheat. The critical potassium soil test does not differ by crop but by soil cation exchange capacity (CEC). For soil with a CEC greater than 5, it is 120 ppm, and when less than 5, it is 100 ppm. All these soil test values are for the Mehlich 3 soil test.

Manure testing

When comparing P2O5 and K2O availability in manure to commercial fertilizer, there are two things to know. First, the pounds of available P and K nutrient shown on the manure test is equivalent to commercial fertilizer. Therefore, those manure nutrients are a one-to-one replacement for commercial fertilizer. Second, manure is not a good substitute when starter fertilizer is needed.

Apply recommended rates

Applying the correct amount of fertilizer will optimize crop yield and minimize environmental concerns. The following tables are from the Tri-State Fertilizer Recommendations for Corn, Soybeans, Wheat, and Alfalfa bulletin from OSU Extension. A pdf copy of this bulletin can be accessed here: https://go.osu.edu/tristatefertilizerrecommendationpublication.

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