Fuel and fertilizer prices have the potential to shrink the bottom line on the farm. Volatility in the fertilizer markets have pushed the cost of inputs upward and some believe this is a result of rising grain prices in a year of drought. But USDA data shows that fertilizer prices have been steadily increasing since 2002, and while soaring corn prices certainly have a direct effect on inputs pricing, the trend says that inputs would likely have gone up either way this year, drought or no drought.
So what is a grower to do? In the face of this year's declining yields, cash on the farm may be in short supply. USDA has found a few ways farmers can save on their inputs as we move out of harvest and prepare the soil for next year's crop.
The best thing farmers can do to lower fuel expense is to keep engines running properly. Regular maintenance on farm machinery will help keep fuel efficiency at its peak. The USDA study also shows that 40% of farmers who negotiate price when buying fuel saved at least 5%. Currently, Inputs Monitor Regional Index has Farm Diesel ranging from $3.58 - $3.84/gallon; a $0.26 spread over the Corn Belt. Armed with Inputs Monitor pricing data, growers can be confident they are getting the best deal.
To lower costs on fertilizer, start with proper soil testing before making any purchase. Soil testing will show exactly what deficiencies the soil may have and where application rates can be adjusted to maximize efficiency. Growers may find that certain nutrients have greater carryover this year given the scant rainfall that marked this growing season. Look for P&K carryover to help pick up some of the slack. (Click here for more). Farmers should use soil tests rather than yeild-based-estimation as yields vary wildly this year, even within the same fields. As with fuels, farmers who negotiate for discounts can reap a substantial savings on fertilizer.
Inputs Monitor carries a full range of updated local inputs pricing data for the entire Corn Belt, and can give growers the upper hand at the negotiating table when it comes time to book inputs. Do your homework. Check local and regional prices before visiting your inputs retailer and be prepared to ask for the best deal.