“We're looking at fertilizer prices that have doubled or even tripled in the last 2-1/2 years,” shared Cornell’s Chris Wolf during the December 14, 2022, Hoard’s Dairyman DairyLivestream. “That's affecting planning decisions here and elsewhere.”
The reality of a second year of elevated fertilizer costs had a listener of the webcast asking an important question. Does it make sense to utilize a co-op’s 3% financing loan to prepay fertilizer or take a wait-and-see approach?
“If you're just sort of looking at this from a risk standpoint, I would think about pricing nitrogen at multiple points in time because we don't actually know what's going to happen in the spring,” advised the University of Illinois’ Gary Schnitkey.
The farm management extension specialist explained that fertilizer pricing will continue to be reliant on a number of uncertainties from fuel prices to the war in Ukraine. Of course, there’s always the chance that something unexpected can turn everything on its head as well.
Make your needs known
“The other thing I would say is that you're going to have to tell your suppliers what your fertilizer needs are,” he said. “Everybody in that fertilizer supply chain is skittish, and they want to know how much you want.”
Cornell’s Joe Lawrence has heard similar reports in the Northeast.
“What I'm hearing from some of our suppliers on the ground is, even if you're not going to lock in a price, they're looking for you to lock in tonnage,” he detailed. “They're telling me that their suppliers are unwilling to make commitments for the spring without firm orders.”
To watch the recording of the December 14 DairyLivestream, go to the link above. The program recording is also available as an audio-only podcast on Spotify, Google Podcasts, Apple Podcasts, and downloadable from the Hoard’s Dairyman website.
The next broadcast of DairyLivestream will be on Wednesday, January 11, at 11 a.m. CT. You can sign up here now. Registering once will sign you up for all future events.