BLUE MOUNDS, Wis. – Milking cows is an optimistic venture right now with March 2022 Class III prices at $22.45 per hundredweight, as reported by the United States Department of Agriculture. Yet, that is not the whole story as input costs continue to reach historic highs.  
    “Healthy soils are key,” Scott Wood said. “It’s important to remember that diversity above the ground influences diversity below the ground.”
    Wood is a consultant with Midwestern BioAg headquartered in Blue Mounds, Wisconsin.
    The current markets reflect fertilizer prices rising substantially year over year, in some cases nearly doubling from 2021 to 2022.
     Todd Dirkes is a retail manager for Nutrien Ag Solutions in Sauk Centre, Minnesota.
    In the Upper Midwest, the fertilizer cost for 1 acre of corn is about $260; total input costs are about $800 per acre of corn. This is about $200 more than the spring of 2021, Dirkes said.  
    “Depending on when the grower put fertilizer on the acre, those costs vary a little bit,” he said. “The fall-applied phosphorus and potassium was a little cheaper than it is today.”
    Coupled with the dwindling supply of inputs and record fuel prices, navigating the market and safeguarding a future in farming will look differently in the months ahead.
    Wood said livestock farmers have two advantages that non-livestock farmers don’t have.
     “With livestock comes the value or credit of what those livestock produce, manure,” he said. “And, crop rotation with legumes. Dairy farmers have to maximize the value of both those things this year.”
    The practice of cover cropping has become increasingly popular in the dairy industry as a way to change soil structure and create more resistant, healthier soils.
    “The goal is to enhance or reduce the demand for synthetic nutrients,” Wood said. “This isn’t to say that every farm shouldn’t have to use potassium or nitrogen, but that they have a budget and can ultimately reduce the amount of fertilizer they’re putting on in markets like what we’re seeing.”
    If synthetic nutrients are still needed, with the right soil management practices, applying fertilizer may be able to be deferred until fall in the event that input costs are reduced by then.
    “Rather than doing a dry application on a hay crop, look at doing a foliar which is less expensive,” Wood said. “This temporarily gives us the volume and quality of forages a farmer may need.”
    Wood also encourages dairy producers to consider seeding down more forages, like alfalfa and grasses, on their fields this planting season. Not only will a rotation on the fields lead to healthier soils, those particular forages are highly nutrient-dense crops that can reduce mineral purchases by up to 10%.
    “Look (beyond) yields,” Wood said. “You want the yield. Don’t sacrifice it. But, better-quality leads to better digestibility. If the soils are mineralized, plants will absorb it and that should lead to a reduction in out-of-pocket costs.”
    The factors leading dairy farmers to rethink their field management because of the high input costs have culminated in a perfect storm scenario.
    Foremost, fertilizer and chemical prices respond to petroleum prices.
    “In establishing a crop, whether row or hay, it is affected greatly by petroleum prices,” Wood said. “Some farmers took advantage last year and prepaid for products as late as December, even as prices increased.”
    The prices have also been a knee-jerk reaction to the Russia-Ukraine war with a significant amount of pot ash and potassium sourced from that area of the globe. Within the United States, a hurricane last year caused one of the largest nitrogen producers to shut down. And too, the bottleneck of bringing in imports from cargo ships has affected the supply chain much like other industries have felt.
    “It’s been a domino effect,” Wood said. “There are a lot of things that happened to add up at exactly the wrong time.”
    Dirkes agreed.
    “This has been a little longer term than everybody thinks,” he said. “We don’t see the chemical situation clearing up fast either. At this point, we believe it’ll take at least a year before we see the stresses of supply issues come off.”
    Unfortunately, this situation is nothing new to the industry.
In 2012, the last time the Upper Midwest saw a severe drought, grain prices increased, and farmers were encouraged to convert grazing or forage acres to cash crops.
    Wood said that works temporarily.
    “In that timeframe, we saw a lot of land where fence lines were taken out to gain more acreage for that high value crop,” he said.
    Those prices plummeted two years later.
    “It got to the point where some farmers didn’t know how they were going to survive,” Wood said. “I’m afraid what we have currently, that might put us there in two to three years from now where lower crop prices can barely support inputs.”
    While the world waits for petroleum prices to come down or a normalcy is reached in the markets, Wood encourages farmers to get their soils tested and go back to the management basics of crop production. Testing soils every four years provides a blueprint of abundant and deficient nutrients. Then, take that knowledge and make decisions appropriate for the farming operation.
    Most importantly, prepare and farm forward.
    “Farmers are good managers and manage through all scenarios and stresses,” Wood said. “Know the differences of your nitrogen, potassium and phosphorus sources, and be mindful that the cheapest fertilizer ingredient can be the most detrimental to your fields.”