OT - Fertilizer - When Do You Typically Buy?

[Bill VA]

A farm center within striking distance of me is offering a "deal" for pre-ordering fertilizer - if you order before the end of the year. Just found this out and haven't vetted any other co-ops prices yet, so I don't really know if the prices are good or the same ol - same ol, just let me tie your money up for 3 or 4 months until delivery.

Question is -

1. When do you typically buy your fertilizer, December, May, is there a better time of year you shoot for?

2. Are you seeing fertilizer prices going down with lower fuel prices and do you forsee the trend to continue - in other words, do you roll the dice an wait for a few months for a better "deal".

3. I'd like to buy in 2016 to expense it in that year vs 2015 - so if the "deal" is not so real, I'll just wait.

Any experiences/sage advice is appreciated.

Thanks,
Bill

 

[Bill VA]

Did it again - meant to put this on the tractor talk section!

Bill

 

[paul]

December, but some rare years it gets cheaper in spring.

Thus may be one of those rare years......

Fert is difficult, it mostly is a monopoly, very few actually supplying it. Lot of heavy volume to ship so it gets hauled in fall for next years application when shipping rates and space is available as a 'back haul'.

So your coop or supplier often has already paid for it long before December - or at least has it spoken for or delivered so there is little effort to lower the price.

A very tough market.

Paul

 

[centash]

I agree with Paul and your #3. Sometimes I wait until the corn I have stored goes up a bit and the fertilizer prices go down a bit....still waiting...

Ben

 

[3020jd2955]

We typically buy right at year end to get the pre-pay discount. May not always be the cheapest time every year if you really compared pennies, but I have always felt the percentae discount for pre-paying was too good to pass up and would offset any future savings if you waited. And it probably evens out over time. Every year you might have saved a little by waiting for spring there are probably two years it may go up in the spring and you were protected by already being locked in on the price.

I can understand not wanting to have two years of fertilizer costs in one year, but as long as you stick to the pre-pay plan it will only impact you that first year. Then the following year you will still have a normal year of fertilizer costs to expense, it will just be for the upcoming year vs. past year.

 

[Dave H (MI)]

Generally, the morning that I am going to put it down.

 

[kyhayman]

I usually buy on the 31st of Dec, right around 5 pm. Sometimes I date my check the 1st. Depends on which year I need it in. My dealer typically buys his in September so his prices are pretty well set.

 

[JMS/.MN]

I do pre-year end tax planning with my CPA in Dec, and plan my purchases before Dec 31 accordingly.

 

[Bob Bancroft]

For the past several years I have bought and paid for it all right now, and it has worked to my benefit. This year I bought and spread potash last month. Fert. man says no hurry on the rest, (MAP and liq. N), besides, I spent my money on drainage and another shed!

 

[Bill VA]

kyhayman!!!!!!

I've read a TON of your posts from years back regarding using a disc mower, followed by a tedder experiences and your comments on the New Idea disc mower conditioner.

The New Idea mower conditioner, now the Massey Ferguson 1359 is something of interest in that a study showed the average hp requirement was 38.8hp and the peak hp requirement was 52.9 - at 6.5 mph and 1.5 tons per acre cutting. I've got 51ish PTO max and don't think I could set in the seat of my tractor any faster than 5 mph. So the New Idea 5209 (aka MF 1359) has me somewhat interested - one of these days, maybe.... ;-)

Anyway - I appreciate your old posts (as well as everyone else's too) and probably have read a ton of them.

Question is - are you still making hay, timothy, OG, alfalfa or doing something else? Still using a 5209 or something newer?

Thanks again!
Bill
New Idea 5209 Mower Conditioner Review

 

[Leroy]

Only bought when ready to apply, was always avaible at applying time and paied only for what was delievered, not for what you guessed you needed and did not need it all. Now sprays were different as that was only delievered to dealer one time ahead of use time and you had to pay for it to be ordered by dealer as he had to pay for it when he ordered it and if you over ordered you just had to carry it over for next year, under ordered unless you could find a different dealer with some on hand it did not get sprayed. And you ordered it when the dealer got his price list and he had a one time chance to put in order so you had to be prepaired to do it on the chemical suppliers scheduall no mater if this year or next that you wanted to put it on the tax for. But going thru this dealer instead of one that had different times for paying and ordering this was a lot cheaper. Fertilizer we years ago got delievered in bags during the winter and if you missjudged the abount you needed you either carried those bags over for the next year and had to pound it back into usuable shape after caking or you planted last without fertilizer. This was before there were any fertilizer plants you could go to and pick up when you needed it. It was a neighboring farmer that was the selling agent and he would send in the orders and they would be brought out on a straight job 1 1/2 ton truck for over a hunderd miles and unloaded in your barn till time to load up and use and they were 80# bags. They hauled about 3-4 ton per trip on those trucks. And at that time we put on 200# of 3-12-12 per acre on corn total. Can't remember figures for wheat or oats. Hay and beans never got fertilizer. Dad bought one of the first sprayers around in 1950 and did custom spraying for a few years, 2N Ford with one 55 gallon tank on 3 point mounted sprayer, 5 gallon rate per acre.

 

[MSS3020]

Bill I'm just a hay farmer.. but I have a guy down the road from me that raises goats. He lets me run down there and fill my manure spreader and spread on my place just to get rid of it. I make a ton of trips but once I apply I usually dont again for two to three years. I usually keep track of where I spread and rotate spreading every three years. Makes it so I dont have to do the whole field in one year.. just a little every year..

 

[LonM]

I generally pre-pay seed and fertilizer before the end of December. Most years it pays to have the fertilizer already bought before spring, but now and then it will go down in spring. Here are a few options:
1) You can pay now for a set amount of product, knowing that if the price drops later, you are "out" the difference. Technically, this is how the IRS wants us to handle pre-paid items: A known quantity at a known price, not just $XXXXX worth of something...
2) Your supplier may let you buy a certain dollar amount and then assign it to a quantity when spring applying occurs. This way you have the deduction for this year, but it leaves you unprotected to an increase in price later. In this case, an IRS auditor might frown over your pre-pay records.
3) Some combination of 1 and 2 that would allow you to lock in a ceiling price, but leaves the bottom side open so that you can capture the benefit of a possible drop in price later on. Not many dealers like this one, as it leaves them more vulnerable to price fluctuations.
Hope this helps!
Lon

 

[notjustair]

I prepay chemicals but not fertilizer. In looking at the trends, I think it will be down in the spring. It hasn't followed fuel this year and is higher than a cat's back. I'll bet In the spring there's an abundance because everyone holds out. They will cut price just to move it.

I put liquid applicators on the planter but I'm not sure I am going to use it this year. Liquid fertilizer is just so high. All of the ground I rent is long term (decades) so I prefer to broadcast starter and build up all of the soil not just the band of the planter. I thought it was a good idea at the time and may be again if fertilizer in general keeps up. Right now I don't think I will mess with it.

 

[Bill VA]

Thanks everyone for your replies!!!!!!!

Bill

 

[massey333]

Seems to be a lot of BRAVE people on here with their money.We have lost a least 4 old businesses since mid-early 80s till 2000s that offered these early pay prices and then folded leaving people with NOTHING.Some of them over hundreds of people affected.Your call,your dime to do with as you please.NO,I wasn't one of them.

 

[kyhayman]

I'm still at it . Backbone is a timothy orchardgrass mix. In 2009 we just about folded our tents, finished the winter with most of our inventory still on hand, but the Texas drought saved us. Before it was over I'd ended up buying more hay to resell than I'd ever grown and had a trucking company, lol. Go figure. It hasn't let up since. We broke 10,000 rolls sold in 2010/2011 and went over 20,000 last year with around 25 percent our own production. We won't break it this year because the hay simply isn't there.

Not sure if its better now or not, I'm stuck in an office too many days. With the economy picking up a bit construction's started back up. So that keeps me off the equipment more and more. Its a mixed blessing.

Right now we're using NH 1411 disc mower conditioners, I keep a 5408 NI to get into a couple of fields that the gate is between 2 trees and too narrow for the bigger mower. Tedders upgraded too, to what ever NH put out new last year. I really like it, seems a lot heavier built than the old NI I had. Sold most of my old iron last year at the Farm Bureau auction. Last upgrade for a while was a round baler, just signed the papers on a NH 450 bale command net wrap Christmas Eve trading in a NH 644 bale command net wrap and a NH 650 on it.