By Matt Reese
Planting season has finally arrived after a frustrating cold and soggy start to spring. Are there more frustrations ahead for corn and soybean farmers due to the ongoing supply challenges and high fertilizer cost scenarios?
“I don’t think the issue is going to be that we’re going to be short on supply domestically. The challenge that we face is how do we make sure that we as a retailer are in a good position to satisfy the needs of our customers,” said Robert Mullen, vice president of agricultural technology for Heritage Cooperative. “If you haven’t secured fertilizer, at this point you certainly need to start having that conversation so that we make sure we take a position on getting product into the bins so that we can satisfy your needs. And I can tell you on the retail side, that’s all we’re trying to do right now is make sure that we have product in place where we know we’re going to need it. It’s a high volatility market. The worst thing that we could do is for us to be really long on our supply because of the potential for downside risk for us. We don’t want to be super long on any product, because if we are, we’re taking the risks of what’s going to happen to the price of that material moving forward. We want to make sure we have enough on hand to cover all of our customer needs, but not too much. So over communicate with your supplier to make sure that they have the product on hand for your needs as you move into the spring. There might be some logistics issues, too, of getting products in place. That’s going to happen fairly infrequently, but that risk does exist.”
Regardless, fertilizer costs are going to be high in 2022.
“We’ve heard a lot of challenges in terms of supply and of course, fertilizer prices are high and a lot of it is driven by what’s going on globally and in Eastern Europe with Ukraine and Russia. There is the inability to really get their anhydrous ammonia production system up and running because of higher natural gas costs. All of that is putting pressure on our global supply chains and prices for nitrogen,” Mullen said. “Belarus has a history of some human rights violations. As a result, there are sanctions against them, including from the United States back in December of last year. They supply about 20% of the globally traded potassium that hits the market. And now that they are sanctioned, they’re not actually able to get their materials to port because Lithuania is their primary port access and they’ve shut down their access. So that is almost 20% of the potassium off the global market. There are some bigger manufacturers that think they can ramp up their production to alleviate some of that supply and hopefully get prices back in line with where we think they probably should be. But I, I don’t foresee that happening until maybe the beginning of the fall.
“Phosphorus a little bit different. There’s been some domestic duties that were established, but there’s actually some legislators at the federal level talking about backing off of those duties levied against products out of Morocco. Nitrogen, potassium and phosphorus are all experiencing the same thing, but for different reasons. The hope is as we move forward, some of those prices will hopefully start to ease as we get into fall, but it’s really going to be dictated by what happens in Eastern Europe and how quickly we get some of the supply that’s been taken offline globally.”
With high fertilizer prices, Mullen expects there to be some application reductions made for economic reasons, even with high crop prices.
“You’re striking a balance. I’m sure there have been sales that have been missed because of high prices. There are X amount of dollars that a farmer has to allocate to grow the crop and I’m sure there have been some opportunities lost to provide nutrition. But allowing us to still see some profitability, even at these higher input prices, is the strength of the commodity market,” Mullen said. “Sound agronomic decisions are always sound economic decisions, regardless of what the economic influences are. That’s not to say that economics should not be a consideration because you’re operating a business and it has to remain profitable. Allocate your resources to the nutrients that you require for your operation. That’s how farmers should manage the nutrient inputs. And we have tools to help us do that. We have the capacity to collect that information, and we can make variable rate applications to match what nutrients we need to apply with where they need to be applied. Sound agronomics are still sound agronomics.”
The high price situation for 2022 has made nitrogen decisions very important, said Eric Richer, with Ohio State University Extension in Fulton County.
“We are encouraging producers to look at the Maximum Return to Nitrogen calculator (cnrc.agron.iastate.edu) that considers the price of both corn and the price of nitrogen cost per unit. It is not perfect, but it is a way for them to start and get a better grasp on their nitrogen rate this year. If you’ve always been at a high rate, maybe this is the year to consider cost dynamics and maybe use 10, 20 or 30 pounds lower than you have in the past,” Richer said. “But any time corn gets to be around $7, there is a different dynamic. We are certainly in a different dynamic than the ‘21 crop where producers were able to source N at 30 or 40 cents a unit. Now we are talking about UAN prices at over a dollar a unit and $580 to $600 per ton and anhydrous really close to that per unit at $1,500 a ton. But with $7 corn, you do not want to leave anything on the table. The calculator is a starting point to evaluate those dynamics, but it is fluid. What we decide today may not be the decision we make June 15 when we sidedress.”
In terms of sidedress nitrogen applications, manure is certainly getting some additional attention in 2022, said Glen Arnold, manure specialist for Ohio State University Extension.
“The manure supply is there. Many of our livestock producers have made great strides in recent years to capture more of the nutrients in their livestock manure. When we look at the value of swine finishing manure for example, that was worth more than 3 cents a pound in N, P and K before fertilizer prices took off. Now that is getting closer to 7 cents a pound. It is an opportunity to really utilize it and N is a good 50% of that value. If we can get manure applied at or on top of a growing crop so we can utilize it, it can really cut our commercial fertilizer purchases,” Arnold said. “In most of our finishing manure related to hogs we are usually at a 2:1 ratio. There is twice as much N in 1,000 gallons of manure as P2O5. When we go out, we are aiming for a sidedress of 200 pounds of total N on the crop. We are putting 100 pounds of P2O5 out there and that is exactly what a 2-year corn and soybean rotation is going to pull out of the ground. We balance nicely for phosphorus and pretty darn close on potash as well when we use manure in that way. If we use dairy manure, that is more watered down, but it can provide a third of the N or maybe half of the N the crop needs depending on how it is applied. It goes back to application methods, nutrient content of manure and the time of year it is applied. These fertilizer prices certainly drive farmer interest in innovation and creation of new ways to use something they already have in their pits or ponds.”
Beyond the high commercial fertilizer prices, manure can bring additional value.
“The grain farmer who does not have livestock knows the livestock farmers needs to go someplace with their manure. In the past, they have never been very willing to help pay for application or even pay 50% of the nutrient value of the manure. I think that is starting to turn a little bit,” Arnold said. “The best way to get that to turn a lot is to just do half the field and not put manure on the other half and watch over the next 3 or 4 years the difference between manured and not manured fields.”
Pre-plant manure applications can also be very valuable this year.
“Preplant applications of manure can work almost as well as in-crop manure application. The challenge is to get the manure incorporated to capture the nitrogen without delaying spring planting due to the field being too wet or the field made too rough for planting. An acre-inch of water is 27,154 gallons. Applying 7,000 gallons in the spring is like adding a quarter inch of moisture if spread evenly. If the manure is applied in strips, then the field could take longer to dry,” Arnold said. “The Ohio State University conducted five years of research on preemergent manure application. The manure application was made after corn had been planted the previous day. Yield results were significantly higher than commercial fertilizer applied at the same time. Based on fall stalk-nitrate tests, the manure appears to stay with the growing corn crop much longer than the commercial fertilizer. This should give farmers confidence that spring applied manure can provide the nitrogen needed by the corn crop over the entire growing season.”
Keys to success for pre-plant applications include getting the manure properly incorporated in the soil and agitating the manure prior to application for more consistency.
“Another key is to do your best to avoid soil compaction. Manure tankers are heavy and soil compaction can be seen throughout the growing season and on combine monitors during the harvest season. This would be a good reason to favor using a drag hose for spring manure application if possible,” Arnold said. “If a producer gets the manure application made, then the producer could utilize a Pre-Side-dress Nitrate Test (PSNT) to determine if additional sidedress nitrogen is needed or utilize tissue testing and Y-drop nozzles to determine if additional nitrogen is warranted.”
With high fertilizer prices, crop growers may be able to save significantly on phosphorus costs by minimizing applications where soil test phosphorus (STP) is above the crop critical level.
“A good thing for us to talk about is soil test level of P,” said Greg LaBarge, Ohio State University Extension agronomist. “We see in Ohio fertilizer use data that farmers have been using less P fertilizer and we do see declines in STP. When you think about trying to manage P losses from edge of field, managing in the agronomic range is an important step. With STP levels higher than agronomic ranges, it does take a long time to draw those fields down. We talk about it in decades and not in years when we have soil test levels above 100 parts per million (ppm).
“The recent work on the Tri-State fertilizer recommendations put us in a great position to help farmers to make phosphorus fertility decisions from an economic and agronomic standpoint so we maintain soil test levels where we need them for crop production. We want to manage between the critical level of 20 ppm up to the maintenance limit level of 50 ppm, that is the sweet spot for agronomics and minimizes environmental impact. Having STP levels in that agronomic range allows us to defer fertilizer applications when fertilizer prices are high. Another step in P management is that losses at application can happen. Minimizing surface applications and getting P incorporated in the soil is an important conservation practice.”
It is also important to identify the very high P levels in fields out there and go into drawdown mode. Jay Martin is an Ohio State University professor of ecological engineering taking a look at addressing the very high phosphorus levels in some soils.
“Looking at the soil test P levels, the vast majority of fields out there are in that agronomic range where we want them to be. Between 5% and 10% of those fields are what we call high P fields and they have the potential to emit large amounts of P into steams and eventually Lake Erie. Those are fields that could really benefit by having management next to them,” Martin said. “The in-field practices being supported by state and federal programs won’t really help us that much on these fields because the P is already on them. At this point we are looking at edge of field practices to intercept that P movement from the field before it gets to the stream or ditch.
These fields are large emitters per area and they are some of the places we can get the biggest bang for our buck for management. One of the challenges we have been able to address with this project is actually finding those fields and getting the proper management in place. We have done that by working with the agricultural community. We have worked with agricultural retailers to identify potential fields with high P levels on them. Then we had those retailers talk to their clients and tell them about our group from OSU. By working with the public/private partnership we have been able to identify about a dozen of those fields.”
Martin’s group has been able to implement three practices so far in high P fields: filters, wetlands and drainage water management. Those with fields with very high P levels should work with Martin (email@example.com) or contact local Extension or Soil and Water Conservation District offices on addressing the issue.