Soil health in a time of rising fertilizer costs

Timely tips to make conservation work for your bottom line 

Fertilizer prices have almost doubled since the start of the 2021 and are at their highest levels since 2008. It may make both environmental and financial sense to put low production acres into a multi-year conservation reserve.

 

Global factors affecting fertilizer markets

 

You’ve likely been watching fertilizer prices surge this fall. This has been caused by global events such as China’s ban on fertilizer exports and the European energy crisis, which was caused by a surge in demand resulting from a post-COVID economic recovery and cold winter, Russia’s limited gas sales, and lower than usual supply from Norway.

These two major factors combined with a number of smaller factors have fertilizer markets soaring. And what could that mean for your bottom line?

How you can exert control

It may feel as if you’re forced to be a price taker on fertilizer, and that you can do nothing about these global factors. In addition to considering planting less fertilizer-intensive crops, it’s worth contemplating how many units are being used on how many acres.

Here are two tools that can help when fertilizer costs are high: 

1. Comprehensive Nutrient Management Plan

A CNMP manages the amount (rate), source, placement (method of application), and timing of plant nutrients and soil amendments. The plan helps farmers avoid over-application of fertilizer which a) saves farmers money by ensuring they don’t buy and apply more nutrients than necessary and b) reduces nutrient runoff, which damages America’s waterways.

Programs like the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) offer funds to offset the cost of a CNMP.

While incentive payments differ from state to state, in Ohio, EQIP will pay farmers between $6.48 per acre for using a CNMP to best employ conventional fertilizer usage and $59.69 per acre for using precision fertilizer management on the farm.

2. The Conservation Reserve Program

You can also do something different with some of your land while input prices are high. One idea is to enroll unproductive fields in the Conservation Reserve Program (CRP). 

CRP encourages farmers to convert highly erodible cropland or other environmentally sensitive acreage to vegetative cover, such as tame or native grasses, wildlife plantings, trees, filter strips, or riparian buffers. Farmers receive an annual rental payment for the term of the multi-year contract.

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It looks as if American farmers will continue to face high fertilizer prices in the near to medium term. No doubt some will consider switching to crops that require less fertilizer, but consider taking advantage of the financial assistance offered by the USDA. It can help you manage fertilizer efficiently and grow crops on high yielding ground, and/or to enroll some marginal acreage in a conservation program. 

FarmRaise can help farmers think through the applicability and benefits of these programs and over 1,000 others, and apply to them. We offer an online EQIP application that takes around 20 minutes and cuts through 8 cumbersome government forms. It awards farmers an average of $57 per acre to implement on-farm conservation practices like no-till, cover cropping and windbreaks. Sign up here.