The marketplace is demanding more for fertilizer. The demand may be creating shortages for producers. These factors are causing price increases, especially with nitrogen. With increased prices and shortages of product, it is critical to have a plan in place as to how to use your fertilizer dollar. The first place that every grower should look when looking at fertilizer prices is to see whether the commodity prices justify the expense. Commodity prices are high now and there are opportunities to lock in commodity prices for fall delivery that will more than compensate for the high fertilizer prices. Knowing your costs is important to insure that you have adequate coverage for your income position on your farm. Prices change throughout the year, so taking a position in the market place now is the only way that prices can be protected. If you want to have price protection in the fall for your crop, hedging is a tool that needs to be used. If you know you costs, you can select the amount of crop to be pre-sold that is appropriate to your operation. Risk is the other consideration for every producer that is facing high fertilizer prices. The rainfall risk in the Meadow Lake area is minimal this year. We have over three feet of wet soil which represents 5 to 6 inches of moisture in the ground. That means that we need about 8 inches of timely rain throughout the summer to grow an excellent crop. In our area, we have over a 90% probability of doing this so the odds are in the producers favor. As far as frost, hail and flooding goes (the other risks), they are always there. This year it looks like we will get an early start on seeding, so the frost risk should be less. The risk from hail and flooding will depend on the frequency of severe weather. If hail is a concern, insurance is an option. Soil testing is a tool that can be looked at to provide a balanced fertility program. Having the right amount of fertilizer in place to grow the targeted yield that you expect is important. A soil test gives an indication if the right nutrients are available. This is critical when looking at any fertilizer program, but it is essential in years of high prices. Timing of getting the soil test done gets more difficult as we get further into the season. No matter what happens with the soil test, get expert advice on what fertilizer should be used in your fields. There is potential to make money this year in your fields even with high fertilizer prices. The key to making this happen is to plan for success. By this I mean that all the risk factors that you recognize and can do something about should be dealt with. With high commodity prices, we are seeing opportunities in your fields. Moisture conditions are good so the risk from drought is minimal. There is the potential for a good year if mother-nature cooperates.
By Dave Cubbon, P Ag