Thursday, January 6, 2011

Farm Fertilizer Prices

These next two graphs showing three decades of fertilizer prices were included in the recent report, "Where should we focus our management efforts?" [pdf] by Kansas State's agricultural economist Kevin Dhuyvetter. (h/t Stu Ellis)

In his report, Dhuyvetter states that:
  • Fertilizer prices were relatively stable for the first 20 plus years of this time period.
  • A new “normal” might be characterized by much more volatile NPK prices.
  • When fertilizer prices were fairly stable and relatively low, economic optimal rates changed very little from year to year.
  • Higher prices since 2005 resulted in a study of the relationship between yield and nitrogen which suggests diminishing returns from applying additional fertilizer.
  • Optimal fertilizer recommendations are based on soil properties (e.g., soil-test N, organic matter, etc) as well as producer provided yield goals.
  • Numerous tools have been developed that can help producers evaluate the various input decisions they have to make every year and while they may not be perfect, using them increases farm profitability over simply making "gut decisions".