Fertilizer prices have edged slightly downward in recent months, but remain a worrisome aspect of the 2022 growing season for farmers. In addition to supply chain issues relating to the pandemic, China has said it will cut fertilizer exports, which will cause prices to soar higher.
Arkansas Agricultural Experiment Station officials caution growers to choose their cuts carefully and are now offering a toolkit to help make those decisions easier and more cost effective.
“Fertilizer prices soared in 2021 and more than doubled in the last 12 to 18 months,” said Trent Roberts, associate professor of soil fertility and testing for the Arkansas Agricultural Experiment Station, the research arm of the University of Arkansas System Division of Agriculture.
The new tool, PRC (Potash Rate Calculators), joins a lineup of Decision Support Software available from the Agricultural Experiment Station. The Excel-based tools can be downloaded free at bit.ly/AAES-DecisionTools. Once downloaded and installed on a Windows PC, growers can input soil test results, potash costs, crop prices and anticipated yield. Potash is the common fertilizer source for potassium.
“The program offers a profit-maximizing fertilizer rate,” said Michael Popp, professor of agricultural economics and agribusiness for the Agricultural Experiment Station.
By changing input values, Popp said, growers can explore the impacts of reducing potash application rates and decide where the best savings-to-profit ratio will be for their crop, or even the impact of not using potassium.
“It took me two minutes to figure out the most profitable application rate for soybeans,” he said.
“I like to use the tool at the field level,” Roberts said, explaining that its recommendations can be tailored for specific conditions in each field. “Its scalability is so useful and allows producers to tailor their potash rate to their specific farm based on what their costs will be.”
Fertilizer prices have skyrocketed in the wake of the COVID-19 pandemic. John Anderson, head of the department of agricultural economics and agribusiness, said the cost of potash now costs a little over $800 per ton, up from $375 per ton a year ago. Other fertilizers are similarly high, with urea, a primary nitrogen source in Arkansas, around $900 per ton, up from less than $400 per ton a year ago.
While fertilizer costs are rising, crop prices are also high, Anderson said. Long-grain rice is around $14.25 per hundredweight. For rice, a hundredweight equals 2.22 bushels. Corn is going for $5.70 per bushel, cotton at $1.01 per pound and soybeans are going for $13.52 per bushel.
“These are the best prices we’ve seen on our crops in 10 years,” Anderson said.
But Roberts said producers are wondering if crop prices will keep up with fertilizer prices and other input costs.
“When crop and fertilizer prices both go up, deciding what to cut back and how much is not a straightforward matter,” Popp said.
Traditional fertilizer recommendations are aimed at maximizing yield, Popp said. But maximum yield is not always the same thing as maximum profit.
“Maximum profit is driven by agronomic response to fertilizer, soil test potassium, price for the crop, and the cost of fertilizer,” Popp said.
The four must be considered together, he said, and determining what potash rate maximizes profit is a complex calculation. All extension row crop specialists and county agricultural agents are trained on the decision tools and can help growers with questions and to learn to use them, Roberts said.
Roberts said Potash Rate Calculators are important because growers tend to underestimate the importance of potassium as a crop nutrient. Nitrogen tends to get top billing for most crops other than soybeans, followed by phosphorus. When farmers seek a place to cut costs, they eye potassium. But potassium contributes to the efficiency with which plants use other nutrients, Roberts said. A tool like PRC helps farmers make informed decisions on where they can afford to cut expenses.
“Good data is key to getting the best information from any of these decision tools,” Roberts said. “Soil testing is the foundation of any fertilizer management decision, and these tools are based on it.”
He added that getting quality soil samples is essential for getting good results. Nitrogen, calcium, phosphorus, potassium and other nutrients are used by plants to grow in soil. When a crop is harvested, the nutrients are often removed and farmers use manure and fertilizers to replenish lost nutrients. This process has been improved through the years and has led to higher and higher yields, according to Soils Matter.
Growers can learn how to collect good samples from their county extension agents. The county offices can submit those samples to the Agricultural Experiment Station’s Soil Testing Lab.
Roberts advises growers to avoid making emotional decisions on the farm.
“It’s easy to get overwhelmed by price changes, availability of inputs and all the things they have to consider,” Roberts said. “Use these tools coupled with the information you have at your disposal and don’t let emotions guide your decisions. Let the data tell you what to do.”