Sound Advice: Thinking Ahead as Nitrogen Prices Rise 

As a sales agronomist, my attention, like a lot of producers out there, has turned to nitrogen. As a critical component of basically all phases of plant growth, supplemental nitrogen is a staple on farms around the country, which is why the tremendous increase in cost and availability that we are now experiencing can be so stinging to growers everywhere.

Fertilizer prices have increased dramatically since late last season; monoammonium phosphate (MAP), di-ammonium phosphate (DAP) and liquids were the first to increase, then nitrogen products soon after. This doesn’t come as a big surprise — historically, when corn prices increase, nitrogen fertilizer prices follow closely behind.

So when can we expect things to return to normal? Higher raw material prices and shortages, increased transportation costs, labor shortages and import delays all combine to increase production costs. Some recent conversations I’ve had over the last couple of weeks indicate there is a lot of hope that some fertilizer plants will come back online and help to ease the supply issues by the spring. However, the prospect of resurgent production coupled with the belief that prices will come back down is causing some to hold out.

Before making any decisions, let’s back up and consider just how unique the situation is. The current nitrogen shortage may be one of the first instances where it is raw material shortage — not consumer demand — that is the primary driver of these price increases. It’s entirely possible that with rising global fertilizer demand, a strong commodity market and tight crop supplies, these prices will persist into next season and possibly next fall.

Other factors to consider:

• If you are able to get ammonia on the farm, are you going to have time to get it in the ground before the next freeze? Trying to knife in anhydrous inputs in muddy conditions is not advised either! If not, then you need to deal with the headaches of getting it applied in the spring or look for some alternatives.
• Pre-pay is the best option 9 out of 10 times to make sure that the most value is gotten from the dollars spent and to help with peace-of-mind through the winter.
• Lack of moisture throughout much of the corn belt can be a concern. If it persists, it is very likely that nitrogen uptake by the crop will be reduced. In dry conditions there is often very little leaching or denitrification, so nitrogen loss is significantly reduced. Less nitrogen uptake, combined with minimal nitrogen loss, usually results in greater quantities of nitrate remaining in the soil profile. Consider taking soil samples for nitrates this fall — these samples can help you decide how much of a nitrogen credit to take so that you can make the most accurate application decisions for next season’s yield goals.

With all these considerations, we can realistically conclude that there may be some switchover of acres from the typical rotation over to soy if the prices do stay where they are. This is always a balancing act as potential reduced corn acres could impact the market price and drive it back up.

One alternative that many producers are looking to are ways that traditional inputs can be supplemented without sacrificing yields. In many cases, nitrogen inputs can be offset through a variety of new, alternative solutions that are reaching the mainstream, such as:

• Nitrogen-stabilizers: These fall into two categories — urease and nitrification inhibitors. Nitrification inhibitors slow microbial response/​consumption to minimize loss, especially in anhydrous (NH3) and fall applications. This does impact microbial populations significantly as it’s basically a pesticide for microbes. Urease inhibitors are more for liquid/​ground (UAN/​Urea) applications as they protect against ammonia volatilization by keeping fertilizer in the urea form.
• In-furrow: In-furrow places applied fertilizer right in the seed trench so that emerging roots will find a nutrient source quickly. This can be impacted by weather though and requires equipment upgrades that can be expensive
• Biologicals: Biologicals add additional living microorganisms into the soil to provide specific benefits, most of these products are focused on one particular nutrient and can require special handling and mixing to be properly applied, such as keeping refrigerated or needing to be applied within a couple of hours after being mixed in the tank.
• Microbiome activators: An emerging area of science that focuses on utilizing what is currently living in the soil environment and helping it reach its full potential. Products in this category, such as SOURCE®, are easy to handle, apply and store, as they are stable chemistries. These products can open up a lot of opportunities for reducing input costs without sacrificing yield — and at the same time being cognizant of sustainability and soil health.

When considering your nitrogen plan for the coming season — make sure to take your NUE score into account, as well as what is in your soil tests, to make sure that you get the most out of your applications for this coming season. You want to ensure there is plenty to sustain the crop but that you don’t over-apply and over-protect where you didn’t need to.

Rich Haynes

Sales Agronomist