Delaying The Fertilizer Decision

Flooded corn in Indiana

“Corn fields” such as this one in Indiana were a common sight throughout the Midwest this year.

Comments gathered from several retailers recently evidenced a classic good-news-bad-news scenario. Good news is prices and supplies of nitrogen, phosphate, and potash seem adequate. Bad news is growers don’t want to even think about fertilizer buying, thanks to uncertain commodity prices and lousy weather that’s cut yields in many areas.

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At Ceres Solutions LLP, Wingate, IN, branch manager Mike Carrell reports rain impacted field work considerably. Once crops were planted, applicators only got two or three days every two weeks to head out. One example: “Most of our soybeans were planted around May 20-22, and about 80% of them didn’t get sprayed until the first week in July. That’s when it was dry enough to get across them — then July 7th we got rain again,” he says. In fact, record rainfall hit Indiana in both June and July, contributing to crop losses of 25% or higher in some parts of the state.

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In Ohio the situation was just as bad, and wet weather caused serious nitrogen losses. “Corn is firing up all the way to the top leaves already in our area. So it’s obvious we had a later hit on nitrogen loss in some fields than what we originally suspected,” reports Mike Tobe, vice president and agronomy division manager at Legacy Farmers Cooperative, Findlay, OH.

“I’d say we’re going to have a number of growers who have at best average yields. In some flooded areas they’re going to be at least 25% to 30% off of normal years,” he adds.

Excessive rain in early summer and accompanying nutrient losses in Illinois caused a spike in business for Schertz Aerial Service, Hudson, IL. In fact, in-season ammonium nitrate applications increased three to four times over last year’s business, says Scott Schertz, owner. “The vast majority of that work was a reaction to yellow corn, when the deficiency was really showing up,” says Schertz.

Schertz’s aerial offerings in the face of nitrogen (N) needs drew customers the company had never worked with before. Plus, after all the rain, a few growers who had scheduled then cancelled services earlier in the season called to re-sign, as they faced N loss and no field access for rigs.

“Our fertilizer applications ended up going considerably later than normal, and they would have impacted our normal fungicide operations. We really had to limit where we would do them so we wouldn’t cut into the normal core business,” Schertz notes.

In Indiana, Ceres Solutions contracted with aerial applicators to get rescue N on stressed crops. While the service can be more expensive, Carrell says growers had to do something because basically “they didn’t have any nitrogen on.”

Even growers further west experienced water problems. Wes Pollart, agronomy manager with Aero Applicators, Sterling, CO, said his state faced 15 to 20 inches of rain in a six-week period. Annual rainfall there is normally 14 inches. Some corn didn’t get planted, and he believes nutrients leached out of the reach of root systems of crops already established.

Legacy Farmers Coop’s Tobe said fertilizer pre-ordering by growers for the upcoming fall/spring was “pretty much zero” at presstime, with any inquiries revolving strictly around urea ammonium nitrate (UAN).

“I would say they’re not going to make any decisions until they’re ready to go to the field,” he believes. It may be hard to say if that time frame will wind up being in September, October or November.

Slow Market Activity

Indeed, John Christian, president of Green Valley Agricultural Inc., Wayland, MI, has seen “very little interest” from growers in purchasing fall fill — and believes it is reflective of significantly reduced cash flow on the farm.

Retailers themselves weren’t doing any extensive buying or making full commitments. Their approach in late summer has been to layer in product, so they have something on hand if growers want it.

Daryl Warren, vice president of agronomy at Ceres Solutions LLC, Crawfordsville, IN, believes ultimately there’s going to be plenty of product if his company can get it in the right place at the right time. “Just-in time-inventory doesn’t work very well with field applications,” he says. “You don’t want to get caught in a price up-spike but you don’t want to wait too long to get some laid in. And you don’t want to have too much too early.” (He adds that Ceres Solutions actually layered product in more lightly in 2015 than in past years given the farm environment and commodity prices.)

“For next season, if growers plant the corn we’ll need the nitrogen tons eventually, but the phosphorus (P) and potassium (K) is a little more suspect on what they might use … they might pull back,” says Warren. In general, he believes farmers will be more “timid” for 2016.

Over the past few years, Green Valley’s Christian has seen a reduction in growers investing in soil buildup rates, but at the same time, “producers know that they can’t just remove nutrition from the crop and expect a good yield,” he says. “Despite less than ideal growing conditions we have had good yields and as such, high crop removal rates. We have growers paying more attention to soil testing as a result of reduced crop prices.”

The other market factor on retailers’ minds is product transport, via rail, barge and truck. Companies will be watching for regional problems. For instance, Britt Shipley, grain and fertilizer logistics, Comark Grain Marketing, Cheney, KS, says at one point this summer, rains swelled the Arkansas River, making navigation into the Port of Catoosa difficult. But flooding, low water levels and work on lock systems all “throw curves in the supply chain from time to time,” he says.

Rail UAN was a problem for Ceres Solutions in 2015, says Warren, simply because supplies went so quickly. “The first part of April we were chock full of product and couldn’t take any more, and by the second week of May we were completely empty. We moved a lot in about six weeks, and the rail system couldn’t replace it quick enough,” he says.

Comark Grain Marketing’s Shipley notes that if there’s a big fall crop this season, trucks may become tight, moving grain and trying to move fertilizer.

“The last few years there’s been less pre-buying and pre-positioning of product and more guys are waiting on price breaks until right ahead of season,” he says. “We still have the same number of tons, we just have to do them in less time every year. There are always temporary outages, but I don’t see any big issues. We always seem to get it done.”

Regulations, Opportunities

In addition to field and market conditions, CropLife® magazine also checked with retailers to see if regulations were playing a bigger role in their — and their customers’ — fertilizer decisions.

Legacy Farmers Cooperative’s Tobe mentioned Ohio’s new legislation that restricts application of phosphates only to a cover crop or growing crop, and prohibits their application on frozen ground or snow cover, which went into effect in early July. The result for Legacy Farmers? The majority of its phosphate work will have to be done in a narrow spring window.

The regulations do allow application if there is shallow incorporation of product. So in response, Tobe says his firm has purchased a large tractor/toolbar combination — at a cost of about $350,000 — to do the fertilizer incorporation.

He admits the regulations pose a huge challenge, but says they also offer Legacy Farmers the opportunity to provide a service that other dealers do not. Tobe is also encouraged that anticipated new technology coming out will improve or enhance the unit he has.

Another regulatory challenge noted by Ceres Solutions’ Warren is the nation’s most recent commercial driver’s license (CDL) requirements. Ceres Solutions needs a number of part-time drivers because business is so seasonal, but it’s difficult to get those employees “licensed to where we need them to be,” he says. “That’s becoming a real issue as unemployment is getting lower and the pool of people to pull from is getting smaller.”

Regulations are helping to encourage a general trend towards nutrient stewardship and the industry addressing water quality issues, Schertz Aerial’s Schertz says. “They’re going to nudge the industry to more growing-time applications,” he believes.

His company tries to promote a planned nutrient approach to farmers that includes split applications — particularly with a second installment on corn at the V5/V10 stages — rather than one-time fertilizer applications in spring or fall or last-minute reaction feeding in crisis situations.

Schertz Aerial got into the specialty fertilizer business five years ago, selling ammonium nitrate and potassium nitrate as a core part of its offerings. Schertz has invested in a secure, climate-controlled facility to handle the products.

While he realizes ammonium nitrate can be controversial, he sees a real role for it in fertilizer programs, thanks to its stability and availability, in the topdress market. “We see it as a much better product than urea for being laid on top of the ground. Plants can access it sooner than urea and it provides much quicker greening of crops.”

Aero Applicators’ Pollart says the liquid fertilizer formulations his company uses (from Agro-Culture Liquid Fertilizer) have been growing in popularity because customers like their uniformity, cleanliness, lower use rates and lower salt content. “We’re putting on lower volumes because the product is more stable,” he says. He sees the products playing a key role in responsible nutrient management being called for today.

Dealers reported that micronutrients have been a growing business sector as well.

Legacy Farmers Cooperative’s Tobe says part of the reason for the increase is the growth of site-specific management of crop nutrients. “We are fine-tuning this thing down to where micronutrients are becoming a better part of the overall management plan for crop nutrients,” he says. In fact, about 65% of Legacy Farmers’ customers are now doing site-specific farming and 70% are moving toward grid sampling.

The company has developed its own liquid foliar micronutrient packages for corn and soybeans, trade-named Bushelmax. Tobe’s team had experimented with the formulations for three years with great results, and 2015 marked their first official release as patented products.

Micronutrients have been trending upward at Ceres Solutions over the last four to five years, says Warren. But 2015 was disappointing because many acres slated for product were drowned out or excessive moisture prevented access for applications. In-house, in-season tissue tests and analysis to determine the need for micros were down as well, thanks to the rain.

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