Nov 30, 2022
Crop Nutrient Management and Changing Market Conditions
Rapidly changing conditions are a common feature in the agricultural arena. Things are in a constant state of flux in terms of climate, economics, methods of operation, etc. However, in the past few years, principally during the pandemic and post-pandemic times, changing conditions in agriculture for the desert Southwest have been extremely rapid and substantial.
Supply chain issues have been disruptive to many sectors of the economy and that has certainly affected agricultural operations. Things that have commonly been standard or easy things to manage in the past such as the simple need of replacing equipment or parts have become complicated and expensive.
We have become aware of fragile supply chains and the exposure of single points of failure that can have huge domino effects in many facets of our society, including agricultural industries. For example, during the pandemic it cost nearly $40,000 to move a shipping container from Asia to the U.S. and now things are starting to catch up and it has been reported that containers can now be shipped from Asia to the U.S. for less than $3,000.00.
Fertilizer prices for many materials have more than doubled in recent years, primarily due to basic supply and demand pressures. Fertilizer supplies have been subject basic economic pressures and further exacerbated by the war in Ukraine and the associated changes in natural gas supplies.
Fertilizer Supply and Cost
In a recent report from DTN market analysis (Formerly: Telvent DTN, Data Transmission Network) for the second week of November, retail U.S. fertilizer prices were not substantially different than in October but did have some slight variations with five fertilizers showing marginally lower prices than in October and three other key fertilizers tracking slightly higher. It is important to note that DTN designates a “significant” difference in prices with a move of 5% or more.
The five fertilizers that were marginally lower in price included monoammonium phosphate (MAP), potash, urea, 10-34-0, and anhydrous ammonia. Di-ammonium phosphate (DAP), urea ammonium nitrate (UAN)-28, and UAN-32 were slightly higher in price in mid-November, Table 1. Costs per pound of nitrogen (N) is shown for primary N sources in Table 2.
MAP
|
Potash
|
Urea
|
10-34-0
|
Anhydrous
|
DAP
|
UAN-28
|
UAN-32
|
$978
|
$848
|
$812
|
$753
|
$1,415
|
$930
|
$584
|
$681
|
Table 1. Mid-November retail prices in U.S. markets for several fertilizers. Source: DTN
Anhydrous Ammonia
|
UAN-28
|
UAN-32
|
$0.88
|
$1.04
|
$1.06
|
Table 2. Comparative prices per pound of N. Source: DTN
Crop commodity prices have been higher recently, sometimes to the extreme. However, the increasing costs of crop production have generally overrun the increasing returns on a strong market. In a recent report on western crop production conditions, estimates of cost of production increases in the past year are 135% higher than in 2020 while the return values to farmers have been about 127% higher. Thus, a nearly 10% negative differential exists which exerts a strong impact on the crop production systems of the desert Southwest.
The American consumer is seeing this as well. In the American Farm Bureau Federation’s 37th annual cost survey from volunteer shoppers for Thanksgiving dinner has shown that prices are up 20% this year. This increase is in addition to the 14% increase experienced in 2021.
Nutrient Management
Developing a conservative approach to nutrient management is often considered a risky venture in crop production systems, particularly with a short season crop like a leafy green vegetable that has a premium on quality as well as yield. However, under high fertilizer price conditions and/or tight supply, there is a greater incentive to develop and employ a more conservative approach to nutrient management.
To maximize nutrient management efficiency, the
4R concept of plant nutrient management and application can be helpful. The
4R concept consists of applying:
1.
Right fertilizer source at the
2.
Right rate, at the
3.
Right time and in the
4.
Right place
Along with the 4R nutrient management approach, assessing plant-available forms of the nutrients present in the soil by evaluating soil tests with appropriate indices is a good step in the develop of a more efficient nutrient management program. Then splitting nutrient applications, particularly mobile nutrients such as N in line with crop uptake and utilization are good steps towards higher fertilizer use efficiency by the crop. Thus, timing, methods, and rates of nutrient applications are critical (e.g, 4R management).
In agriculture we know quite well that we have no control over markets and the costs of crop production inputs. However, we can control these inputs in the field, and we do have some tools at our disposal that can be helpful in the process.