Fertiliser Prices – Aiming to minimize impact of price inflation
With nitrogen prices having trebled in the last number of months and phosphorus and potassium prices rising also, drystock farmers are rightly concerned as to how this will affect their business in terms of cashflow and profitability in 2022. Alan Dillon, Beef Specialist discusses options here
While we don’t know if this price spike is a short term issue or a sign of what lies in the future, the reality is that spring is coming fast and farmers will need to make decisions soon based on what prices are quoted.
While every farm is different and detailed analysis will have to be carried out to try and mitigate against the inflated price, the impact will be unavoidable on all farms.
Talk has been circulating at discussion groups about farmers cutting back significantly on nitrogen applications with some suggesting they may do almost without any significant applications on grazing ground and only spread the recommended quantities on silage ground.
These theories don’t really stack up in most scenarios as if any farmer is stocked to a significant level (1.6-2LU/ha or higher) there will be a requirement to spread similar levels of chemical N as last year on the grazing swards to match feed demand. If someone is able to do without 50% of their chemical N on grazing ground next year there is a good chance they never needed it in the first place.
Areas to consider
Stocking Rate. The reality is that the only cohort of farmers that can easily re-adjust their stocking rates to a lower level and reduce fertiliser inputs are store traders or store finishers where short stay cattle are moving in and out of the system constantly. In suckler systems and calf to beef systems the stocking rate is more or less fixed and any attempts to reduce it in 2022 will have long term effects in terms of output value and sales in years ahead.
Using slurry more efficiently. It is widely accepted that using slurry more efficiently by targeting spreading when growth is increasing in the spring and using LESS methods will increase N availability but this won’t make up the full shortfall needed to ensure quality grass growth and high levels of weight gain throughout the season on anything other than the most extensively stocked farms where nitrogen applications are very low to begin with. Slurry spread with LESS in the spring supplies around 1 bag of 9-5-30 per 1000 gallons applied. Farms with lower stocking rates may have only enough slurry to cover silage ground for 2 cuts so bear this in mind when planning ahead.
Lime applications are a must but this should happen after spring slurry applications have occurred so as to avoid volatilisation of N from the slurry and also ensure no lime is spread on land intended for silage cutting in the 2-3 months post spreading.
Slurry imports are a good option with pig slurry valued at roughly 1 bag of 19-7-20 per 1000 gallons, however higher stocked farms will not be able to import much if any of this due to nitrates regulations. Lighter stocked farms are in a much better position to take advantage of this supply.
Multispecies Swards and high clover swards have potential to supply 100-150kg N/ha when managed correctly. This is an area that is developing in terms of research output and will have a big part to play on farms in years ahead but it will take time to incorporate into farms and infrastructure and soil fertility play a big part in getting the most from these swards. Farmers interested in going down this route need to plan to reseed or incorporate MSS or clover into a percentage of the farms over the next number of years.
Finance. Merchants are stating that credit may be an issue next year which is related to the cost of fertiliser rather than the volumes purchased. Farmers may need to have the power to pay up front for fertiliser next spring, something they may not be accustomed to. This may mean planning out stock sales and purchases a little differently or more likely will require a call to the bank to look at increasing working capital facilities. A number of banks are offering credit line facilities at less than 4% interest currently.
Summary
While all farmers would favour eliminating a cost such as fertiliser from their system, the reality is that our farming systems (outside of organic farming) is built around applying some level of chemical fertiliser to grow our feed. Fertiliser looks to be high for the next number of months and while there is talk of a possible drop in price mid-year, this is a bit late as over 50% of fertiliser is generally applied by May. Delaying silage fertiliser applications in the hope of a price drop is a dangerous strategy as there is no guarantee weather will suit silage cutting later in the summer and also quality and quantity may suffer.
Table 1 below outlines a few points to consider over the Christmas period when planning for 2022.
| Soil samples | Take in December/ Jananuary to help target slurry and lime applications |
| Lime | Apply on drier soils soon – avoid land which will get slurry in the next 2-3 months. |
| Slurry | Use LESS technology to deliver higher N to the sward. Ensure the spreader isn’t spreading slurry too heavy on grass. Target to follow on first round of grazing with 2,000 gallons per acre if possible. |
| Multispecies swards/ Clover | Target soils with good fertility and infrastructure for these grass/legume mixes. Management is key. This is a long term project. |
| Chemical fertilizer purchases | Talk to Merchants. Purchase as required. Look to delay any applications until soil temperatures are high and grass is growing well. Target Protected Urea instead of CAN. |
| Finance | Talk to Banks and outline potential cash flow shortfalls. Complete a cash flow budget for 2022 taking into account possible reduced Merchant credit next year and inflated prices. |
| Grass | Complete a grass walk in late January and budget ahead – grass has grown well since closing began in October, can you turn out in March and have enough grass for first round with no chemical N? Target silage close up in late-March/ early-April and cut in mid-May to ensure quality. |
| Cattle | Look at forward stores. Can some (460-520Kgs) be fed into April and killed out of shed rather than off grass? Calved cows/yearlings need to be turned out in March to ensure grass is utilised and adequate weight gain occurs. There are priority stock. |
National Beef Conference
The National Beef Conference took place virtually this year on 6th and 8th December. The conference consisted of the latest beef research and the best technical advice for beef farmers. Watch it back here
The Teagasc Beef Specialists issue an article on a topic of interest to Suckler and Beef farmers every Wednesday here on Teagasc Daily. Find more on Teagasc Beef here Teagasc provides a Local Advisory and Education service to farmers. Find your local Teagasc office here