Managing higher fertilizer prices

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fertilizer

Fertilizer prices have been increasing rapidly. The Agricultural Marketing Service has tracked bi-weekly fertilizer prices in Illinois since 2008. Prices of anhydrous ammonia, urea and 28% are presented in the chart (as of Oct. 21). The average price of anhydrous ammonia was $1,135 per ton, up by $278 per ton from the price reported Oct. 7. 

The University of Illinois Farmdoc Daily, in their Oct. 26 Weekly Farm Economics newsletter, 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 in ethanol. 

General supply disruptions and labor issues associated with the aftermath of COVID that has impacted all industries also are impacting the fertilizer industry. 

Spring 2022

In its Weekly Farm Economics newsletter, the University of Illinois Farmdoc Daily reviewed price changes from October to April for the years 2008-2020. 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. 

fertilizer prices graph
Prices of three types of fertilizer since 2008. (University of Illinois image)

Soil sampling

Soil testing is always an important management consideration, but it 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 parts per million and 30 parts per million for alfalfa and wheat. The critical potassium soil test does not differ by crop but by soil CEC. For soil with a CEC greater than 5 it is 120 parts per million, and when less than 5, it is 100 parts per million. All these soil test values are for the Mehlich 3 soil test. 

Manure testing

When comparing phosphorus and potassium availability in manure to commercial fertilizer, there are two things to know. 

First, the pounds of available phosphorus and potassium 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. Fertilizer is a significant investment in achieving maximum yields. We strongly recommend dairy producers soil test fields, complete manure nutrient analysis and apply the correct amount of fertilizer to optimize crop yields. 

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(Chris Zoller is an agricultural extension educator in Tuscarawas County and a member of the OSU Extension DairyExcel team.)

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