| FARGO, N.D. -- Unless there is an oil well in the back 40,
rising fuel prices are never good news for farmers. This year, along with
rising diesel fuel costs, the rise in natural gas prices also will
increase the price of many fertilizers this spring, according to a
specialist at North Dakota State University in Fargo.
David Franzen, extension soils specialist at NDSU, says natural gas is
a necessary precursor of ammonia production, which is used by itself as a
fertilizer and is also used as to produce many other fertilizer products,
such as urea and ammonium nitrate.
"Any increase in natural gas has a direct effect on the cost of
nitrogen fertilizers," Franzen says. "To make matters worse,
some smaller nitrogen manufacturers have recently made more money
reselling their natural gas allotments than manufacturing nitrogen
fertilizer. Although this practice does not appear to be widespread, any
decrease in production at this time is not welcome, since stocks are
rather low."
Because of the increase in raw material prices for nitrogen fertilizers
and the relatively low stocks, expect nitrogen prices to be up
significantly from spring 2000 levels, warns Franzen. The best estimate
for spring ammonia prices is at least 20 cents per pound of nitrogen
(about $320 to $340 per ton) and about 3 to 6 cents higher than that for
urea (about $220 to $240 perton).
"It is difficult if not impossible to precisely predict pricing
with raw material prices as volatile as they are, but the important point
is that it will be higher and in most cases, substantially so than last
year," Franzen says. "If rates of nitrogen fertilizer use in
2001 are similar to 2000, a farmer might pay about 30 percent more for
nitrogen fertilizer this year as compared with last year. This is not good
news especially with the abysmal prices being paid for most farm
commodities grown in the area."
Basic principles
Because of the strong probability of higher nitrogen prices this
spring, compounded by relatively low commodity prices, it is important
that farmers and their lenders understand two basic principles, he says.
The first principle is that all crops need nitrogen from some source to
produce profitably. The nitrogen usually does not all come from commercial
fertilizer. The soil provides nitrogen each year as organic matter, and
residues are transformed to nitrogen by soil microbes. Some crops such as
legumes do not need any additional nitrogen, or the nitrogen they require
is very low because they manufacture their own. But the nitrogen must be
available to all crops for those crops to produce seed and/or tonnage.
The second principle is that to be efficient, the farmer needs to know
how much fertilizer is stored in the soil before the growing season and
how much might be made available from other sources during the growing
season.
"Many farmers make decisions on nitrogen fertilizer application
through some common methods they apply what they applied last year, ask
neighbors what they applied last year, ask a fertilizer dealer what
neighbors applied last year, or ask the extension agent what the county
average soil test is this year," says Franzen.
These are not good methods for determining nitrogen fertilizer rates,
he says. The best way to determine nitrogen fertilizer rates is the fall
or spring soil test. The soil test tells the farmer what fertilizers are
needed and is a guide to the rate needed to achieve a certain yield goal.
Some growers are reluctant to believe a soil test and use an inflated
"insurance" rate of nitrogen to make certain the field is not
underfertilized, says Franzen. "By having the soil sampler sample the
field in landscape zones (hilltop/slope/depression), the farmer will have
much more confidence in the soil test number and the need for inflated
insurance rates of nitrogen goes away."
Nitrogen rates
The crop also dictates how aggressive or conservative to be with
nitrogen rates. Crops such as spring wheat and durum require aggressive
rates to give high protein at harvest. Corn requires an aggressive
approach to take advantage of higher yield opportunities in some years.
Other crops such as sugar beets, barley, dry beans and oil crops such as
sunflowers require a more conservative approach to maximize quality
increased sugar content in beets, increased oil in sunflowers, decreased
protein in barley and decreased chance for white mold in dry beans.
Soybeans, properly inoculated, require relatively little nitrogen
depending on cropping history, soil test nitrogen levels and early season
stress potential. For most crops, a site-specific approach to nitrogen
fertilization will reduce the need for insurance rates of niotrogen and
direct nitrogen application to areas of need only.
"This will not be an easy spring for fertilizing," Franzen
says. "A number of forces have come together with bad timing to
create an atmosphere of volatile fertilizer pricing and questionable
supplies. Growers should begin soon to line up nitrogen needs with
suppliers, to contract soil sampling services as soon as possible and to
discuss the situation with their lenders." |