Carefully-Timed Purchases Could Save on Fertilizer Costs
For the first time in years, fertilizer costs for corn are on the rise. Economists say that fertilizer costs for corn could increase $15 per acre next year while fertilizer costs for soybeans could increase by about $5 per acre.
While the price of fertilizer has decreased over the past five years, that trend is reversing with the price now above the three-year average. This is due in large part to the fact that unfavorable weather kept combines out of the fields. The result was lower demand for fertilizer and dealers dropped prices in an effort to get fertilizers off their shelves. The result is likely higher spring demand.
By the middle of last month, anhydrous jumped to more than $500 a ton. That number could increase 15 percent by spring. The price of urea also is expected to increase by about 15 percent during the same time frame. Further, the price for diammonium phosphate is approximately $70 more per ton and the price for potash is $35 per ton higher. Phosphorus and potassium will probably not see price jumps because of already high prices and the fact that they are in higher demand in the fall.
When it comes to seed and chemicals, a shift in management practices could be the key to saving money. Price per bag, trait technology and the amount of seed farmers use per acre all play a part in lowering these costs for farmers.
According to the USDA, seed expenses for corn and soybeans were down 1 percent from 2016 to 2017. The average seed expense for corn was $99 cost/per acre and the average seed expense for soybeans was $58 cost/per acre. Pesticide costs have risen roughly $40 per acre from 2000 to 2017. Those costs include fungicides, herbicides and insecticides.
Agriculture economists say that herbicide resistance may be a factor in rising costs but there are other factors, as well. In light of this fact, it’s important to tread carefully when it comes to using less chemicals as doing so may negatively impact yield. In other words, low-cost application early in the season won’t do much good if you have to spend more on clean-up applications.
Land management is more important than trying to save some money here or there. Instead, success lies in carefully timed input purchases that maximize discounts.