Bought everything early. Just bought half. Still waiting a few more weeks to see. That’s what three Prairie farmers have done this fall in terms of securing crop inputs for 2009.
John Smith of Pilot Mound, Man., bit the bullet and locked in fertilizer prices in July, worried that prices might have gone higher yet. Graham Caskey, who farms near Oyen, Alta., locked in about half of his nitrogen needs and about 30 per cent of crop protection products this summer and fall, and will decide over the coming weeks when to buy the balance. And Michael Spilchuk, who farms near Ituna, Sask., hadn’t bought any inputs for 2009 as of late November. He’ll be watching the market between now and early March to get the best price he can find.
All three producers, interviewed for the Grainews farm panel for December, agreed it has been a tough call to figure out what both crop and input markets will do six and eight months down the road. The year started with record high commodity prices, and soaring input costs. Somewhere in mid-summer, grain and oilseed prices began to fall back, while inputs remained high. And then in September and October, the wheels started to come off the global economy throwing just about every market, including energy prices, into a nosedive.
So what does this all mean for next spring? Fertilizer prices began to slide back this fall, but how far will they go in relation to energy prices? Some observers say if nitrogen fertilizer was produced when the crude oil price was $130 a barrel, don’t expect fertilizer to be sold cheap just because crude oil dropped to $60 a barrel in early December. And on the other end of the scale, if you do wait until late winter to commit to fertilizer and herbicides, will the products be in stock and will retailers be able to deliver in a timely manner before seeding?
Apparently there’s been a huge run on crystal balls this year, as well.
JOHN SMITH, PILOT MOUND, MAN.
John Smith figures he probably acted too quickly, to some extent, when he locked in fertilizer prices back in July. Nitrogen was selling for about $1,300 per tonne, while phosphate was about $1,200 per tonne (both at least double the price they were in 2007). But advice at the time, in light of soaring global demand, was that prices could be higher and delivery uncertain if producers waited until fall and spring to lock in a price.
“Normally we buy our anhydrous in the fall, but this year we bought it in July when prices were high,” says Smith, who along with his wife Sheila operate Smith Family Farm. They crop about 3,800 acres of both commercial and pedigree seed. “With the seed business, spring can be pretty hectic, so our policy has always been to get the nitrogen on in the fall. The advice we got in the summer was that fertilizer prices could be even higher in the fall, so we decided to lock it in then.
“Even though it was a high price in July, I think we still saved a few dollars than if we had bought at one point in the fall, but since then the world price for 46-0-0 has collapsed. Whether the price of anhydrous would have dropped that much, I don’t know. At the time in July it was our best opportunity. And with our workload on the farm we really didn’t have a choice. We had to get the anhydrous on the in fall.”
Smith does regret buying the phosphate in July, as well, because he doesn’t need that until spring. “Again from what we were hearing in July we were worried about supply,” he says. “But, now I don’t think that was a valid concern. We got caught up in the emotions of the moment, and probably would have been better off waiting.”
Smith is glad he did lock in some chemical prices this summer. He has lined up all the Tilt he will need for 2009. The fungicide was in short supply in 2008 and isn’t expected to be much better in 2009. “We wanted to make sure we had it,” he says. “I doubt the price will go down over winter, so I felt it was a good move.” And he also locked in a price on glyphosate amid reports the price of Roundup herbicide could increase 30 to 50 per cent by spring.
“My view on crop input prices next year is this,” says Smith. “This summer fertilizer suppliers were saying get used to the fact it is a global market place, and if you don’t want to pay this price, someone else in the world will. So I think next year, as these markets are down, the retailers can go to their suppliers and say, get used to the fact it is a global market and if you don’t want to supply the product as these lower prices, someone else will.”
GRAHAM CASKEY OYEN, ALTA.
This past summer Graham Caskey bought about half of the fertilizer he’ll need for his 6,000-acre east-central Alberta grain and oilseed farm in 2009. Concerned about both price and supply issues in the future, he figured if he could get 46-0-0 for about $800 per tonne, it was better to have at least a portion of his requirements on the farm early.
“Normally we buy about half of our fertilizer in the fall,” says Caskey. “But this year we acted in July as a hedge against next year. At the time it looked like fertilizer prices were going to be considerably higher, which they were for a while, but we were also worried about the ups and downs of supply.”
Caskey usually bands about 10 per cent of the nitrogen in the fall, and will store the rest until spring. As of late November when Grainews talked to him, he’s looking at the market trying to decide when to lock in the rest of his nutrient requirements.
Along with fertilizer, he also
Lee Hart is field editor of Grainews, based in Calgary. Contact him at 403-592-1964 or by email at [email protected]
tillage tools to break a hardpan layer that materializes about 12 inches below the soil surface on their farm, which is mostly clay loam soil.
“This year on those couple sites, the roots reached below that hardpan layer where there was a good reserve of nutrients. Parts of that field are also subirrigated,” he says. “All factors considered, the crop had exceptional nutrients and with subirrigation, it was like growing a crop under a conventional irrigation system.”
Overall, however, he’s expecting the subsoiling will increase yield by about 20 bushels per acre. As roots grow below that hardpan layer, the crop can make use of nutrients and moisture. “In some of our soil testing we found on two quarter sections that we had as much as 200 pounds of nitrogen below that hard pan layer. Those are nutrients the crop can’t reach. The roots go down, but as soon as they hit that hardpan they grow sideways.”
That’s another aspect of the exceptionally high yield story. Because soil tests had shown high levels of nutrient carryover below the hardpan level, Steinberger only applied 30 pounds of nitrogen at time of seeding. “There was this great reserve of nitrogen in the soil the crop couldn’t reach until we subsoiled,” he says. “We applied 30 pounds of N but the crop actually used 140 pounds of N.”
Steinberger says the roots of a wheat crop can grow seven feet deep, while the roots of some native grasses can grow as much as 30 feet deep.
The Steinbergers were surprised to find that a hardpan layer had developed under their crop land. There is no exceptional amount of equipment traffic on their fields. Every year they do some chisel plowing, and each spring they make one pass with a cultivator before seeding.
They made the first subsoil treatment as part of an on-farm trial back 1999. The goal wasn’t to deal with a hardpan layer. It was more an attempt to get certain crop nutrients deeper into the soil. Research at Purdue University had shown there was a yield benefit in corn by placing nutrients such as phosphorous, sulphur, and potatssium about 12 inches below the soil surface.
“I thought if that treatment improved corn yields it might be good for grains and oilseeds, too,” says Steinberger.
They bought a DMI subsoiler with a parabolic curved shank and modified it to place the nutrient blend about 12 inches deep. They got the nutrients down, but they didn’t see any real difference in yield related to nutrient placement. What they did see was a difference in yield related to the subsoiling. In areas where they did not subsoil, yields were lower.
The Steinbergers didn’t particularly like the performance of the DMI subsoiler, so a few years later they bought a Miskin v-ripper with 20 inch shank spacing. They treated more of their cropland with this tillage tool.
“With two treatments, in 1999 and again in 2004, using the two types of deep tillage tools we have treated the whole farm,” says Steinberger. “In some areas that hardpan layer was four to six inches thick. Until we did that first subsoiling back in 1999 we didn’t think there was a hardpan layer. We figured if there was any compaction, frost action would take care of it. We could dig in our fields and the soil was fluffy and loose down to about nine inches. But then you get down another few inches and it is like hitting cement.”
While Steinberger is convinced that subsoiling is a necessary treatment every few years, to break up the hardpan layer, he still wasn’t completely satisfied with the performance of the two deep tillage tools he had.
After reading about the Australian built Agroplow deep tillage tool in a Grainews article in early 2008, Steinberger was interested in learning more. He came to the AgroPlow Canadian headquarters at Crossfield, Alta., north of Calgary, for a better look.
One downfall, in his view, of both the DMI and the Miskin deep tillage tools is that they caused too much soil disturbance and actually turn the soil over. “With deep tillage I want the hard pan layer to be shattered but I don’t want the soil mixing,” says Steinberger. “I want the various soil horizons to remain in the same order.”
That was an important feature of the Agroplow deep tillage tool. The digging blade works below the hardpan layer, lifting upwards and breaking the soil sideways without soil inversion or mixing.
Steinberger bought a 22-foot wide Agroplow deep tillage tool with 13-inch spacing. He only got about 80 acres of his farm treated this fall before winter set in. He pulls the plow with a Challenger 85D 370-horsepower tracked tractor. “I plan to work the subsoiling into a rotation so we are treating fields every three to four years,” he says. “We hope to make it a fall treatment ahead of the canola rotation.”
Steinberger was so impressed with the Agroplow tool, he also agreed to serve as the company’s first U. S. based product sales rep and consultant. He can be reached at 701-848-6741 or by email at turbo_po[email protected]Contact the Agroplow Canadian office at 403-946-5300 or visit the company website at www.agroplow.com.
Grainews will have more on subsoiling in the January 12 issue.