Beat high prices

Dec 1, 2007 12:00 PM, By Lynn Grooms

Forward contracts, prepay

Williams says that, with fertilizer and fuel prices and land rents as high as they are, you should take advantage of forward contracts and lock in prices to cover your expenses. If you plan to prepay to help save on crop input costs, Williams recommends prepaying for fertilizer first, followed by seed and then crop protection products.

If you did not already make fall applications, you should lock in your spring supply, says Tom Warner, president, Crop Production Services (CPS), Galesburg, IL.

There was not much evidence that growers cut back on fertilizer rates this fall, Warner says, adding that most know from experience that high yields require sound fertility. “Growers with high P and K needs could cut back this year, but they know they are mining their soils and will have to catch up later if they want to continue improving yields,” he notes.

You can cut back a bit on P and K, especially if you use a starter fertilizer, Williams says. You can fertilize in-row, making nutrients more available to the plant. “We ran one trial this year and saw a 14-bu./acre yield advantage when we used starter fertilizer compared to an application with no starter fertilizer,” he says. This trial was in Wisconsin, which experienced a very cold spring in 2007.

Nitrogen fertilization is necessary to raise acceptable corn yields, says ISU's Sawyer. “Cutting below economic optimal rates will result in reduced yield and lower net return,” he says. “The same thing happens with over-fertilization, so it is important to look at proper fertilization rates and good management practices. There is no guarantee that fertilizer prices will be lower in the future, so not applying needed fertilization now might cost as much or more in the future.”

Offset costs with manure

Manure can be a good source of N for corn production and certainly can offset N fertilizer use. But it takes extra planning and effort to use manure as a nutrient resource, Sawyer says. “Not all manure nutrients are crop-available in the year of application, so some differential account for that is needed when determining the value of manure [which depends on its source],” he says.

Manure becomes more valuable as fertilizer prices increase, especially when P and K prices, as well as N prices, are high. Manure is more valuable when applied to fields that need P and K in addition to N, says Purdue's Camberato. However, he says, N availability is more uncertain with manure than anhydrous or 28% UAN, so you should consider applying a portion of the N requirement with manure and the remainder with inorganic fertilizer to reduce the risk of over- or under-applying N.

He also recommends using the pre-sidedress nitrate test (PSNT) to check on soil N supply in manured fields before deciding to sidedress N in corn.

Another option is to hire custom application. Dick Stiltz, Lincoln Land FS, Jacksonville, IL, says you should not dismiss custom work because you think the cost is too high. In many cases, it makes more sense to hire custom application services than to do it yourself when you factor in fuel, labor liability and other costs, Stiltz says.

He agrees with Warner that if you did not already make fall applications, you should lock in your spring supply. In fact, he cautions that if you do not already have fertilizer contracted, you may be shut out of getting what you need for spring.