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A Three-Point Strategy For Buying Fertilizer

The more knowledge you have the earlier you can make exact moves on what you need to purchase, when you want to purchase it, at a price that fits into your crop plan for the year.

With crop prices backsliding from the highs they have been at the past two growing seasons, margins are starting to tighten up again. There are no more important letters in the farmer input alphabet than N and P, however it seems that the yearly struggle to maximize value from those letters and do our best not to pay the highest price is upon us again. There are strategies and resources out there to help you accomplish those goals for the upcoming year.

GATHER INFORMATION

In today’s world of technological marvels information is the most accessible it has ever been. Price discovery can be achieved easily first by calling around to the local sellers and finding out what they are offering your blend at. This way you can get a clear idea of what is going on in the area. Making these calls early and often can help you develop an opinion on if there seems to be a shift to a higher price or a lower price in the near future.

There is also a great network out there in Fertilizer Buddy (http://fertilizerbuddy.blogspot.com).This website is an open forum where producers come together and share fertilizer information and prices for different blends from all over the prairies, eastern Canada and the U. S. This really opens up your options and information about what is going on in the fertilizer market. There are also links to other large data pools for the fertilizer industry. Fertilizer Buddy gets going in early December, which gives you plenty of time for price exploration.

Between knowledge of local prices and what’s happening in other areas, it’s much easier to make an informed decision about your fertilizer needs. The goal is to make the best decision at any given time with the information you have, not to go around kicking yourself for getting a raw deal because you didn’t do your homework.

UNDERSTAND YOUR NEEDS

Pinpointing exactly what fertilizer blend you need before you buy is one of the most overlooked strategies when purchasing fertilizer. There are plenty of places to buy different blends, however if you are not looking specifically for what you actually need, all the information you have gained is useless. This means the more knowledge you have about your nutrient needs for the coming year the earlier

you can make exact moves on what you need to purchase, when you want to purchase it, at a price that fits into your crop plan for the year.

What do you need? The answer is found in a soil test. The earlier you can do field soil samples in fall the quicker you get the results. From there it is also important to have a corresponding crop plan to go with those soil results. With these two things in place you can accurately find the blend and volume you need for the coming year. The earlier you have this in place the more time during the winter you have to watch the fertilizer market and make a move when it suits you best. Also knowing this allows you to buy the proper blends or blends you need to maximize

effectiveness while minimizing cost and the amount having to be bought and stored.

MAKE A MOVE

Winter is a great time to secure fertilizer supply for the spring, however in some cases delivery is a condition of the sale. Do you have the storage room? It’s important to first consider farm storage capabilities and whether or not you can capture that extra value by storing it yourself when the opportunity arises. Both cash flow and storage capacity can make pricing and purchasing decisions for you.

Making fertilizer purchases isn’t much different from pricing crops — you can’t allow the fear of not getting the exact best price of the year figure into the thought process of the purchase. Just like with crop pricing, set a goal of being within the best 10 per cent of the price market for the year. Shoot for the best price you think you can get based on the market data at the time and go from there.

Rumblings of the market moving one way or another are usually accurate and should be trusted to factor in to the decision making process. There are exceptions, of course, such as the recent potash price run up. Many people pre-bought fertilizer as the price was skyrocketing and then the recession brought everything back down. This rarely happens, thankfully.

If you’ve done your homework, have a good handle on you actual nutrient needs and know what prices you’re comfortable paying, go ahead and make a move when prices align with your plan. Don’t get to fuzzed up about hitting the lows.

Jay Peterson farms near Frontier, Sask.

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Jay Peterson farms near Frontier, Sask.

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