Declining fertilizer prices

Photo courtesy of UW-Madison CALS

Photo courtesy of UW-Madison CALS

Carrie Laboski
Extension Soil Scientist
Department of Soil Science
UW-Madison College of Agricultural and Life Sciences
(608) 263-2795
laboski@wisc.edu

Carrie Laboski explains how the decrease in fertilizer prices affects farmers and what causes the price of fertilizer to fluctuate.

Time – 3:06 minutes

0:12 – A 20 percent decline
0:32 – How to take advantage
1:03 – Work from soil test
1:22 – Things that affect fertilizer prices
1:45 – Recent price trends
2:16 – Price adjusted recommendations
2:27 – For more information
2:59 – Lead out

 

TRANSCRIPT

Sevie Kenyon: The decrease in fertilizer prices; we’re visiting today with Carrie Laboski, University of Wisconsin-Madison/Extension in the College of Agricultural and Life Sciences and I’m Sevie Kenyon. Carrie, fertilizer prices are going down. What’s going on?

Carrie Laboski: We’re seeing from late fall until spring, maybe about a 20 percent reduction in some fertilizer prices, not all. And that’s a good thing for the farmer. Unfortunately, it’s probably not enough to close the gap between the cost of production and what they’ll earn on their crops.

Sevie Kenyon: Carrie, do you have any advice for how farmers can at least take advantage of this?

Carrie Laboski: The key thing to look at is our nitrogen rate guidelines for corn are price adjusted. So that means, looking at the price of nitrogen fertilizer relative to the grain price that they expect to sell it for. And so when the price drops a little bit that changes how much nitrogen they might apply. The other thing it does is with phosphorus and potassium fertilizers, is they may be re-evaluating how much they can afford to apply this year.

Sevie Kenyon: How does a farmer go about analyzing that?

Carrie Laboski: You need to start with a soil sample and then get the sample tested in a lab and learn how much phosphorus and potassium you have in your soil. We here at the UW provide some guidance on how to interpret that and provide recommendations for the nutrients.

Sevie Kenyon: Carrie, what kinds of things affect the price of fertilizer?

Carrie Laboski: There are a lot of things that affect the price of fertilizer. A lot of times natural gas affects the price of fertilizer and that’s largely tied to nitrogen because there is a lot of natural gas required in the production of fertilizer materials. And then if you also look at grain prices vs. fertilizer prices, they kind of track each other.

Sevie Kenyon: Carrie, can you give us a little snap shot of how fertilizer prices have trended over the last several years?

Carrie Laboski: Prior to 2008, fertilizer prices moved around but there was some relative stability particularly for products like potassium. In 2008, a lot of things changed and fertilizer prices spiked very high. They stayed high for a while and started coming down and so they’ve had some ups and downs over time, but we’ve seen a lot more instability in pricing since 2008 than we had prior to that.

Sevie Kenyon: Carrie, are there strategies for farmers to use to compensate for this price volatility in fertilizer?

Carrie Laboski: The key way that we at UW can help farmers compensate with that is really with our nitrogen rate guidelines for corn and also wheat. They are price-adjusted guidelines. Our data that we collect through our research trials, we evaluate that, and we evaluate that through the lens of economics. So we’re not looking for maximum production, we’re looking for maximum economic production, so maximizing profitability.

Sevie Kenyon: Carrie, if people are interested in more information about fertilizer, what should they do?

Carrie Laboski: One place they can go is the University of Wisconsin Nutrient and Pest Management Program’s website. In a search engine, you can type in UW Nutrient Pest Management Program.

Sevie Kenyon: We’ve been visiting with Carrie Laboski, University of Wisconsin-Madison/Extension in the College of Agricultural and Life Sciences and I’m Sevie Kenyon.

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