November 3, 2004 | By: Laura Skillman
PRINCETON, Ky.

Kentucky ’s farm sector is experiencing one of its best years in a long time with good prices for most commodities. These good economic times are helping offset higher costs for energy and fertilizer, but as farmers look to 2005 there are some things they can do to combat continuing higher costs.

With many agricultural activities driven by petroleum from the grease gun to the diesel combine to nitrogen fertilizers, high oil prices can have a dramatic impact on production costs. 

“Unfortunately, things still have to be done,” said Suzy Martin, farm management specialist for the Ohio Valley Farm Management program. “They can lock in prices when they are down or prepay to get price discounts.”

Locking in prices and prepaying can give farmers a better idea of what they will need in terms of cash flow, she said. Most farms large enough to get bulk discounts already are doing so. For smaller operations, an alternative may be to join forces with others get these discounts. 

In the past three years, bulk diesel fuel has increased from 96 cents in April 2002 to $1.31 per gallon in April 2004, according to the Kentucky Agricultural Statistics Service and the price has risen even more in recent months.

Nitrogen fertilizer also has substantially increased. Anhydrous ammonia prices have risen from $250 per ton in April 2002 to $379 per ton in April 2004, according to the reporting service. While ammonia nitrate prices have increased by $68 per ton since 2002.

Not only is the price for nitrogen increasing but phosphorus and potassium costs are escalating as well.

“We’ve done quite a bit of research in the past three years to determine if our fertilizer recommendations we have been making are accurate and with very little exception they are,” said Lloyd Murdock, an agronomist with the University of Kentucky College of Agriculture. “So if a guy wants to use economical rates of nitrogen, if he’ll use our recommendations found in publication AGR-1, then he will be pretty close to the economical rates of nitrogen.”              

Some of the things now being studied and guidelines established for include tests that would allow farmers to determine how much nitrogen may be lost in a wet spring. Basal stalk nitrogen tests can also be used at the end of a growing season to determine if nitrogen rates applied for the season were excessive or not enough.

“If you don’t know if you’ve been over fertilizing or if you’ve cut back and you want to know if you are in the right ballpark, this will help give you that answer,” he said. “These are tools the farmer needs to start using.”

Soil testing continues to be important to ensure proper potassium, phosphorus and pH levels. With increased cost of these fertilizers, farmers need to use the recommendations called for in their soil tests, otherwise, they may be over fertilizing, Murdock said. It is also important to aim for the medium level for these two nutrients rather than high level, for the most economical outcome.

Use of manure and poultry litter is also likely to increase as the cost of litter is a good buy compared to fertilizer, depending on availability in an area, Murdock said. If a farmer has good, easy access to litter, it can be a good choice, he said. It not only adds nutrients to the soil but also helps build up organic materials and increases yields as a result.

Murdock said high fuel costs have farmers reevaluating their tillage practices.

“If you don’t need tillage then it is costing time and money,” he said. “High fuel costs probably will reduce tillage but there are some soil types that need tillage. What a farmer needs to do, is sit back and reevaluate where he stands. He needs to look at crops he’s planting and the soils he’s planting in. If you are in poorly drained soils, then you probably need some tillage, but if you are not on poorly drained soils then you probably don’t need tillage.”

Some producers do deep tillage every other year or so and that also needs to be reviewed, Murdock said.  The way to do that is to use a pentrometer to determine what fields have compaction problems. Another suggestion is to only correct areas in the fields that have a problem and leave the rest of the field alone.

“I’ve had a lot of calls from people this fall who were trying to do deep tillage and they were simply paying a huge fuel bill and they wanted to know if they needed to be doing this tillage and can I do this at a shallower depth,” he said. “It’s having a big enough effect in their pocketbook that they are beginning to think and it is time to rethink it.”

To learn more about soil testing, fertilizer rates and soil compaction, contact a local county Extensionoffice.

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Contact: 

Writer: Laura Skillman 270-365-7541 ext. 278
Source: Suzy Martin, 270-685-8480; Lloyd Murdock, 270-365-7541 ext. 207