Farmers store grain on farm to capture the best market opportunities. That same rationale is why more farmers are buying fertilizer storage, too

To hedge against the volatile prices of fertilizer, many farmers turned to pre-buy programs this past winter. Some programs included on-site storage at the retailer’s. Other farmers took delivery or partial delivery on their fertilizer either by choice or because their retailer asked them to.

Tim Macyk, who farms 5,500 acres in Thorhild County, Alta., stored fertilizer on-farm for the first time this winter. His motivation was price. When he locked in his fertilizer prices at the same time as his grain prices, his retailer wanted him to take it home. “It wasn’t our first choice but given the circumstances, we did it,” Macyk says. It was impossible for him to store it all, so he applied a third to the fields, he stored a third on-farm, and he’ll pick up the last third this spring. For most of the grain farmers with 2,000 or more acres in his region, full or partial onfarm fertilizer storage is by now a normal practice.

On the other hand, Brent Clark, with Superior Agri-Services in Fort Saskatchewan, Alta., says that while most of his customers pre-buy, only a few of them want to store it on-farm. Most do not have onfarm storage and prefer spring delivery. An ag-retailer I spoke to in Vegreville dismissed onfarm storage as non issue for his customers, very few of whom even pre buy.

The question of on-farm storage of fertilizer has been nettling Allan Murray, who farms 3,000 acres near Hayter, Alta. While Murray currently only stores a fraction of his fertilizer on the farm, he feels growers need to get storage issues settled as soon as possible. Murray says farmers do store fertilizer in the field but “there’s only so much they can put in the ground in the fall.” Plus “it doesn’t give the farmer the ultimate relationship between the placement of fertilizer and placement of seed.” As long growers are unable to store their fertilizer in bins, he thinks they are vulnerable in terms of price and logistics.

Historically, retailers have stored fertilizer for farmers, but Murray thinks retailers will not want to do it much longer. He cites several reasons: The industry is being consolidated so smaller retailers are being squeezed. Farmers are using larger amounts of fertilizer than in the past, so retailers just don’t have the capacity. And retailers (often under the gun from the large manufacturers) may need to offload the cost of storage as well as the risk. Having farmers buy and store their fertilizer six to eight months in advance does just that.

WHAT ARE THE SOLUTIONS?

Many retailers are setting up storage programs, but this jacks up fertilizer prices significantly. Farmers who are asked to take delivery but don’t have the storage capacity, face the dilemma of renting space elsewhere or investing in their own bins. Some retailers will split the cost of the bin on the farm with the farmer. But as one retailer asked, “Once farmers have the bins, what’s to stop them from buying from a different retailer in the future?”

Tim Macyk says one retailer offered to pay the rental cost of the bins, but only if he agreed to buy fertilizer there for five years. Macyk refused because he didn’t want to be tied down.

As Murray priced out his fertilizer last fall, he made sure to ask whether the retailer would store and deliver it. The retailer he finally chose found storage at other locations, letting Murray off the hook for another year. But, Murray says, on-farm storage is definitely in the cards.

ADVANTAGES TO ON-FARM STORAGE

Some producers want to beat the spring prices as well as the spring rush. You may have heard reports last spring of retailers who, overwhelmed and understaffed, didn’t get all their fertilizer out to farmers until May 20. “If I’m ready to be in the field, I’d better have some on my farm,” Murray says. “If I want to seed late at night, I want to be able to do it.” He predicts the rush this year will be particularly bad.

Aaron Van Beers, an agronomist with Sturgeon Valley Fertilizers outside of St. Albert, Alta., says if more farmers buy and store their fertilizer in the fall when it’s quiet, the retailers also benefit because the workload is spread out. Ultimately, Tim Macyk says, on-farm storage capacity is just “another tool in the tool box.” It gives farmers autonomy, flexibility, and price-savings.

WHAT TO STORE IT IN

Fertilizer corrodes metal so standard grain bins aren’t effective. Murray has a relatively good barn — entirely wooden — that with a new floor and some additional interior load-bearing walls, could convert handily to a fertilizer storage facility. He’d invest in a skid steer for loading. Macyk knows farmers who’ve used old chicken or hog barns to store fertilizer. “That would definitely be my first choice. It would mean a big savings,” he says. “With fertilizer being so dense, you would be able to fit a lot in there.”

Many retailers use wooden buildings to store fertilizer — and a skid steer loader to pull it out. Wood does rot over time but boards can easily be replaced. Van Beers knows of a farmer storing fertilizer in a big pile on the floor of a Quonset shed. Though some of his customers talked about

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Patty Milligan is a freelance writer based at Bon Accord, Alta.

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