BRANDON, Manitoba -- Predicting and managing fertilizer costs in 2009 may prove to be a difficult task, but new tools are on the horizon.
"Nature is not an Excel spreadsheet, okay?" says Rigas Karamanos of Calgary, Alberta, agronomy manager for Saskatchewan-based Viterra Inc. He recently spoke at the 31st North Dakota-Manitoba Workshop and Trade Show in Brandon, Manitoba.
Karamanos is developing a computer "calculator" available for farmers to consider the impacts of nitrogen and phosphorus application rates, figuring in fertilizer prices, commodity prices, and likely yield responses, covering a number of the region's primary grain crops.
He worked with Western Cooperative Fertilizers Ltd. (Westco) until Viterra absorbed it late last year. Westco was the fertilizer arm of the Prairie Pools. Before working for Westco, Karamanos ran a provincial soil testing analysis lab.
Karamanos says farmers need to discern between "economics and agroeconomics."
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"Agroeconomics is choosing the right rate to make the maximum money you can, with current prices," he says. "Your strategy, when fertilizer prices go up, and grain buying power is reduced, maybe it should be different than when the prices of commodities are so high."
He says farmers need to avoid what he calls the "Fufu Dust Syndrome" of being sold on adding nutrients, including calcium, when it's already available in the soil.
"It's like throwing salt into the sea," he says. About the only major development fertilizer technology is band-style application.
Decision making
Variable-rate fertilizer applications based on soil test variations can be misleading, too, because the limiting factor may be something else -- elevation or moisture -- not the fertilizer.
"You can do variable rate application and still be 100 percent wrong. Just looking at the nutrients is not enough," Karamanos says.
Karamanos developed the decision-making calculator, based on an in-depth study of research databases during the last 20 years, and specific to Manitoba. His work was supported by a provincial grant. He'll present it on March 17 to the Manitoba Fertilizer Subcouncil, which advises Manitoba government on its recommendations to farmers. He's consulting with officials at Agvise Laboratories in Northwood, N.D., and Dave Franzen, North Dakota State University Extension Service soil scientist, who he says is working on something similar based on North Dakota data.
Manitoba results should be analogous to North Dakota, especially in the Red River Valley. Manitoba is divided into moist, dry and arid regions. The calculator eventually will be on a government Web site, but Karamanos says he'll e-mail it to farmers if they contact him at R.Karamanos@WestcoAg.com
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Regarding fertilizer availability, Roger Larson, president of the Canadian Fertilizer Institute, says there were concerns about short fertilizer supplies worldwide before the global financial crisis, and "nothing magical" has taken place in the world to diminish a potential world food crisis. He notes North America and Europe are big per-capita consumers of meat protein and, realistically, "the rest of the world will probably never" equal it.
Fertilizer industry analysts think Canadian farmers in 2008 made more money than any time in memory, and 2009 will be their "second best year." Commodity prices are off last summer's highs, but "aren't that far off what they were before the summer of 2007 when things went wild."
He says fertilizer prices are affected by China slapping an 185 percent tariff on fertilizer exports and on India's $23 billion subsidy for their fertilizer industry.
He says Canadian fertilizer manufacturers are bullish on potential demand, with agriculture expected to be one of the best-performing sectors, although uncertainty over investing in inputs may cause delays as the products move through the market pipeline.
"I think the entire system will be challenged to get the orders out to the farmers in time for spring planting," he says.
No-tiller speakers covered several other topics as well.
Competitiveness
Les Kletke, an agronomist, author and speaker from Altona, Manitoba, says North American farmers must get better because market fluctuations are going to get bigger.
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"Markets are no longer demand-driven," Kletke says, noting that the money funds got into the marketplace last year and made them "go wild" and then pulled back, wreaking havoc. The overheated prices caused the BRIC countries -- Brazil, Russia, India and China -- to make massive investments to modernize production.
"The potential for commodity production in those countries is overwhelming," he says.
To survive, North American farmers must focus on producing niche-type crops and establish relationships with consumers and processors in order to thrive during a period of increasing volatility and international agricultural development.
"What are you going to grow with 50- to 60-cent nitrogen that you can sell into the world market?" Kletke says. "Russia will beat us on land prices; you can buy all the land you want there for $8 an acre. Brazil grows three crops a year."
China competes with 16 cent-per-hour labor, but Vietnam is becoming more competitive with 2 to 3 cent-an-hour labor.
Kletke declines to say whether high-value niche crops can be a solution for all of North American agriculture, which is heavily invested in producing and transporting commodity grain. But he thinks up to 80 percent of North American farmers will eventually market to "specific end-users," compared with only about 20 percent today.
There will be export markets, even in China where there are a stunning 30 million "multi-multi-millionaires" and they "want food from North America, because they don't trust their food, either." China wisely has capped food production at 80 percent of their nation's needs to maintain at least some food imports from the U.S. and others it trades with.
Kletke says too many North American farmers are complacent.
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"We love toys, but we don't use them," he says. "Does the yield monitor really earn its way on your farm?"
Most farmers have "great color pictures" but maybe 10 percent properly use yield monitors to improve their management. The rest "don't even get the value of bragging at the coffee shop," he says.
Success, sustainability
David Archer, an agricultural economist with the Agricultural Research Service, has been at Mandan, N.D., for two years and before that was in Morris, Minn.
For five years, Archer and colleagues have been part of a nationwide study of what attributes contribute to "successful" and "sustainable" farming. Archer says the study so far has taken him to Alabama, Maine and Wisconsin to interview farmers on "what principles guide sustainable ag systems."
He notes that the unhappiest farmers he interviewed were in Alabama. These contract chicken farmers were making adequate money, but were frustrated because the major processors that own the chickens also dictate the feed and, in some cases, don't allow the farmer to know what's in it. The farmer provides labor but little, if any, management. After a five-year contract concludes, the processor squeezed them by requiring more investments to continue the contract.
"One grower said he felt like a slave on his own place, even though he was making a living," Archer says.
He says the companies make it easy to get into the business but there's "no easy way to get out."
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On the happier side, factors that increase management flexibility for crop farmers includes such things as good financial health, high machinery and labor capacity, broadening expertise, producing crops with multiple end-uses, and low disease and weed pressure, and good soil quality.
"Maintaining the soil resource is as important as maintaining your financial resource," Archer says.
He also says diversification can be a component to success, and can include adding livestock to a cropping operation or even off-farm income. Kletke says perhaps the best measure of success is whether the farmer is anxious to get their children or grandchildren into it.
