Tight profit margins have farmers searching for ways to control input costs, including fertilizer expense. “There might be ways for farmers to become more efficient with fertilizer while maintaining yield, but only by carefully analyzing each farm, field and soil management zone,” says Farm Journal Field Agronomist Ken Ferrie. “Failure to do so can reduce yield and leave your bottom line looking worse instead of better.”
Base changes on real numbers.
“When clients want to cut fertilizer cost, I ask them if they have a plan,” Ferrie says. “How much are they spending on fertilizer? How much do they want to cut? If they don’t know, and just want to cut everywhere, they are in what I call fire-sale mode.
“That means it’s time to eliminate the emotion and obtain actual numbers. Based on expected profit and loss, what are they willing to spend on fertilizer? Agronomically, it’s much easier to shave out $15 per acre from fertilizer costs than to cut $50 or $75. With our goal in mind, we can turn to a current soil test to see where we stand on fertility.”
Plan from a soil test.
“Your soil test tells you whether you can pull back fertilizer rates to improve profit margins without lowering yield,” Ferrie says. “It lets us make a pretty good prediction of the return on investment [ROI] with average prices of fertilizer and crop.
“If your soil test shows adequate or more than adequate fertility to meet nutrient needs for total uptake, we can make a plan that will maintain yield even though it also will decrease nutrient values in the field.“Most farmers with adequate soil fertility levels will be able to temporarily reduce fertilizer rates and maintain yield,” Ferrie adds. “But remember, you’re reducing nutrient values in the soil — mining it — and those nutrient levels must be rebuilt when profit margins return, and rebuilding soil is a slow process.”
Take a wholistic approach to cost-cutting.
Online resources make it fairly easy to estimate the ROI from fertilizer. However, Ferrie says years of Farm Journal studies have revealed it’s difficult to get a consistent ROI on foliar fertilizer, biological treatments, micronutrients and two-pass fungicides.
“If you have tested these practices and have proven the benefits, keep them,” he says. “But if you added them during periods of good profit margins and have not documented results, consider cutting them and putting the money into fertility.”
Keep soil testing.
As you manage your way through the current period of tight margins, and into the next cycle of profitability, test soil every two years.
“We can model how things should go when we make changes,” Ferrie says, “but your soil test tells you what actually happened. The consistent practice will keep you from getting in trouble by depleting nutrients and having to play catch-up with fertility.”
“When farmers try to cut fertilizer rates, they sometimes get in trouble by considering only how much fertility is removed in grain and forgetting how much actually is needed to grow the crop,” Ferrie says. The below information, compiled by Iowa State University, shows how many nutrients — P2O5 and K2O — are removed in the grain and how many are actually required to produce 250 bu. per acre corn and 75 bu. per acre soybeans.
It also shows how much fertilizer — diammonium phosphate (DAP) and potash — is required to replace them. Nutrients in plant residue are recycled, but they are unavailable until they decompose. Sufficient fertility for both removal and total uptake must be provided to achieve maximum yield.
When cutting fertilizer expense, “let your soil test guide your decisions,” Ferrie says. “If it shows adequate or more than adequate fertility to meet nutrient needs for total uptake, we can make a plan that will maintain yield even though it will decrease nutrient values in the field.”
Iowa State University agronomists have calculated the chances money spent on fertilizer will generate a positive ROI at various soil test levels. While applying fertilizer is like depositing money in the bank, when profit margins are tight, Ferrie suggests holding off on applications in soil zones where the chance of return is less than 25%. In other words there’s a 75% chance that applying fertilizer to that soil will not increase yield. Of course, the following year, soil test values will be lower, and the chance of fertilizer returning a profit will increase to 55%.
“If your soil test shows a range of values, and you need to rein in input costs, apply fertilizer to the lower-testing ones and cut back on the higher-testing ones,” Ferrie advises.
When margins get tight, lime is one of the first things farmers want to cut. In reality, it should be the last, Ferrie says.
“A neutral pH reading of 6.5 maximizes nutrient availability,” he continues. ”With a 6.5 pH, a P1 phosphorus test reading of 25 ppm probably would be adequate for the crop. But if the pH falls to 5.0, the amount of usable phosphorus correlates to 8.5 ppm. In other words, two-thirds of the phosphorus in an acid soil is unavailable to the crop.”
Iowa State University agronomists compiled a table showing how the amount of wasted (unavailable) nitrogen, phosphorus and potassium increases as pH level falls:
At a pH of 5.5, the wasted nitrogen, phosphorus and potassium would be worth $40.50 per acre if nitrogen costs 50¢ per pound and diammonium phosphate (DAP) and potash cost $500 per ton.
“Unlike N, P and K, lime applications can’t be more efficient by changing timing or placement,” Ferrie says.
Cutting fertilizer rates below removal levels might be an option to cope with low profit margins, but it should be done only after careful consideration. It’s much easier to deplete versus build nutrient levels back to optimum.
It’s much easier to deplete versus build nutrient levels back to optimum.
“When rebuilding, it takes 18 lb. of P2O5 above the removal rate to raise the soil phosphorus value 1 ppm,” Ferrie says. “If soil tests in the low range of 7 ppm and you want to raise it to 25 ppm, it will take 324 lb. of P2O5. That’s the equivalent of 700 lb. of diammonium phosphate (DAP) fertilizer over the removal rate. On a yearly basis you might have to apply 125 lb. per acre for removal plus 100 lb. more for buildup for six years to rebuild soil values.
“With potassium, it takes 8 lb. of K2O to raise the soil test 1 ppm,” he adds. “So if the test shows 100 ppm, and you want to raise it to 200 ppm, it will take 800 lb. of K2O, which is equal to 1,333 lb. of potash or 0-0-60. You’ll need to apply 125 lb. for removal and 225 lb. for buildup for six years.”
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