Fertility versus financials

Chris

Barron: Welcome everybody to another episode of the Ag View Pitch. Today we're going to have a conversation about financials versus fertility, and I'm lucky enough to have with us today Troy Deitemeyer and You've been pretty popular this spring on some of the— in the spring of 2024 when we were having some of the challenges getting things in the ground and getting things out of the ground, all the weather issues we had and different things. And so appreciate having you back. And today, sure, what I want to hit on is a lot of questions that we've been getting from producers with the concern about where commodity prices are at and getting into 2025 as we are harvest this '24 crop and start thinking about fertility.

We're starting to see a lot of prices come out on— and we're specifically talk today about P and K, maybe a little bit on nitrogen, but mainly on, on the P and K and pH and that kind of stuff. So let's kind of start there with regard to these questions I continually get. And the number one question I'm getting is, how much money should I be spending on fertilizer? Because, you know, I either have already high fertility or it's kind of in the middle range, but I'm not going to cash flow even close. And before we started this conversation, I looked and our average cost as a percent on fertility is between about 6 and 7%, give or take. I mean, there's going to be people outside of that, but that's kind of the, you know, the bell curve.

Troy

Deutmeyer: Sure.

Chris

Barron: Mid is in that 6 to 7% as a total cost of production. So with all that said, the first question I have for you, Troy, is Looking at soil fertility and looking at soil tests, talk a little bit about what producers really need to be focused on with those tests, both accuracy and what's that telling them and some of the decisions they need to make.

Troy

Deutmeyer: Sure. You know, as far as accuracy, I guess at this point—

Chris

Barron: stay a little closer to the mic if you can—

Troy

Deutmeyer: as far as accuracy goes, Chris, I guess from this point we'll just assume that whoever took them, you know, did a good job of making sure that they were at this consistent depth. And things like that. But I guess the big thing that I want to tell guys when we're having this discussion in regards to— I'm getting the same question is, you know, my cash flow looks terrible for '25. Where can I maybe not put any on, or where can I pull back and maybe put a half rate on? And, and I guess one of the things that we've always directed guys toward, if they've ever looked at the yield pyramid that Pioneer has, is the very first thing I want guys to look at, guys and gals to look at, is what their soil pH is reading on that soil test because that can be huge in how much of that PPM is actually available for that crop to take up.

And, you know, for us here in Iowa, I guess I would say any time that we're getting below 6.3 on your soil pH, you know, probably be more important to get the lime on, get your soil pH correct so that way the nutrients that are in your soil or the ones that you're going to apply are actually going to be available to the crop. And a lot of times that gets overlooked. And for whatever reason, reason, a lot of my fellow agronomists and I are seeing that, you know, we have a lot of fields where the soil pH is extremely out of whack. And, you know, guys lime and not even put on any additional fertilizer, and they're getting significant yield bumps. So that's, that's probably the most important component of this question as we start off, is we have to have the soil pH correct before we start.

Chris

Barron: There's some people listening too that have really high pH, and I was like, okay, we're trying to get it the other way. Do you want some of our— you want some of our pH levels?

Troy

Deutmeyer: Yeah, um, yeah, those Des Moines lobe and things like that, they absolutely do have high pH levels. But for a lot of people, it does seem like that that's something that needs to get corrected and needs to be looked at before, you know, we go ahead and start making these decisions on whether or not we can maintain our yield level and possibly pull back on nutrient applications. And I guess as far as, you know, where we start telling guys I feel pretty good that you don't maybe need to apply anything is if you start looking at the university recommendations that are out there, I'll probably agree that once you start getting into that, you know, very high category, uh, which for us here in this part of the Corn Belt is maybe 20 to 25 or 25 to 30 on your part per million on your phosphorus and around 200 part per million on your potash.

I would feel 100% comfortable if you would have a field of that where you didn't apply fertilizer for the '25 season. I think you'd probably give up no bushels. So that would kind of be in that high category. As we look at maybe that medium category, you know, maybe 15 part per million on your phosphorus and maybe 165, 170 part per million on your potash, it's probably a coin flip. On whether or not applied fertilizer for one year is going to, you know, decrease yield if you don't do it. So if you're kind of flirting with those numbers, that's probably where I would start, you know, thinking, well, you know, how has this performed for me in the past? Do I have a bunch of tile there? Are other things in good shape as far as soil structure, decent kind of soil? Then I think you would probably be okay on that as well.

But once we start getting underneath those fertility levels, then I think you start running a pretty high risk of giving up bushels if you don't put any fertilizer on.

Chris

Barron: So that medium is kind of the area where you got to start looking at whether or not— talk a little bit about the low, then I want to come back to the medium. But how much are you giving up? I mean, if you're in an environment where, you know, fertility is not in excess at all, And, you know, and sometimes it's availability too, but, you know, is it, uh, how much you, how much you giving up?

Troy

Deutmeyer: I think, yeah, I think we could easily give up 15-20 bushels on corn and 5-10 on soybeans once we start getting below those medium levels and we don't supplement for that, for that crop season.

Chris

Barron: Well, and, and the reason I'm asking that too is sometimes people, and, and I don't think most of our clients that listen to this are this way. But, you know, the argument a lot of times from, from analysts and stuff is, you know, and brokerage firms and stuff, when they start looking at the corn-bean rotation and acreage battles and stuff, that guys are going to plant more beans. Well, you know, a lot of times you hear that, and, and whether or not that's going to happen, I still think, you know, I have trust in our fellow producers that they're going to make economic decisions on rotations and stuff that's not going to directly impact that.

However, If a producer does choose to go to a few more beans and plant some beans on some of those acres and they are in a lower fertility position, you always hear that comment that, you know, corn responds to fertilizer, soybeans respond to fertility. How much of that is fact? How much of that is fiction?

Troy

Deutmeyer: I think part of that— well, I think it's a little bit of both. The fact part is we know that, you know, you know, corn immediately responds to the nitrogen component that we have in our corn fertility program. And corn— but corn also does respond to the soil fertility part when it comes to the P and K. And soybeans, because we eliminate the nitrogen addition, a lot of times guys will just focus on the fertility component. And I guess when it comes down to maybe making a decision on which part of the fertility opponent do we focus on? I would say for both corn and soybeans, we're looking at potash. You know, if your budget only is going to allow you to put on one nutrient, um, in our experience— and both of them are low— my experience, at least in, in this part of the Corn Belt, says that potash is king.

Chris

Barron: Is that because there's more availability of the phosphorus, or what's the difference?

Troy

Deutmeyer: It just seems because potassium is so interrelated with so many other functions within the plant as far as nutrient uptake, water use efficiency, nitrogen use efficiency, disease, late season standability. It's not like phosphorus is not important, but it just seems like potassium is tied into so many more things, uh, maybe than phosphorus is, that generally we see the guys that, you know, decide to use one or the other, they use potash, they end up being a little bit happier at the end of the season.

Chris

Barron: Yeah, I think one thing that I've heard a number of producers say is, I'm going to spend $50 an acre, I'm going to spend $40 an acre, whatever the number is. Um, so leaning toward— all of the things aside— leaning towards the potash is probably the more advisable option.

Troy

Deutmeyer: I think so. Yeah, take a look at your soil test, and, um, you know, might be different in different geographies. So I'm speaking from my experience that I've had years. So, you know, visit with your local Pioneer rep there, or Pioneer agronomist. They'll have a good feel too for, for your area.

Chris

Barron: Gotcha. Um, as far as, you know, variable rate, talk a little bit about that because obviously you can have a field that tests low but there's areas of the field that could be high and other things, you know. What, what do you see there? I mean, in terms of, you know, financial efficiency and that kind of thing. I mean, how much— I mean, the challenge is, is most everybody's got the capacity to do that in some form or fashion and talk a little bit about kind of what you see there.

Troy

Deutmeyer: Yeah, so typically, I guess I've never really recommended, or for a long time I've not recommended, on variable rate technology or variable rate spreading that any areas of the field get zero, because we know even if they are, are high fertility, eventually they're going to get pulled down from where we want them to be for max yield production. But when we're looking at a one-year cash flow situation like this variable rate spreading can really help you as far as maintaining the yields in the low areas and not spending— or in the low fertility areas and not spending money, you know, in those areas that we could— that we just talked about, that we could go a year or two and not put anything on and not jeopardize yield.

Chris

Barron: When you come up with those areas that need the higher levels, are you drawing those decisions and that information from a combination of data? So like, is it yield data? And fertility testing and something else, or, you know, soil type and all those things, productivity potential, you know. So what are the, what are the kind of the key things you think people should be looking at there?

Troy

Deutmeyer: Um, if we're, if we're going to focus on the one-year cash flow situation, I would highly focus on, you know, the soil test levels and making sure that those low areas do get some and, and we can pull back in those high areas and not have too much of a yield loss. And then that's where they also might want to do like a multi-year yield analysis map and show that, hey, you know, this part of the farm 6 out of 10 years just doesn't, doesn't do it. You know, that'd probably be a location— it might actually be high fertility anyway because you've been putting nutrients on and it, you haven't been doing crop removal.

But that might, that might be a situation where you could bring in some other type of data source, you know, your harvest yield data, and take a look to see if statistically that part of the field just doesn't really produce and you want to kind of roll the dice there a little bit and reduce some input cost on that part of the field, it probably wouldn't be a bad idea.

Chris

Barron: Is it worth doing, um, more or some additional testing on a year like this? You know, say you've got fertility tests that are 2 years old or 3 years old. You know, the problem is, is you kind of want to test at the same time of year, whether you're doing spring and stay that way or fall and stay that way. But let's say you've got fall testing and it's 2 years old, if it's 2 years old, is it worth doing or is it— or do you just go off of those?

Troy

Deutmeyer: I feel very comfortable. I know there's been a big push to— some people are sampling, you know, every year, which I guess I think if you take a high-quality soil test, you know, and evaluate it and you've been keeping up with your, your nutrient application based off of that, I feel very good still using 3 or 4-year-old soil tests. So yeah, I wouldn't think, you know, like I said, we're in a, we're in a money credit or cash flow pinch. So going out and spending an extra $10 an acre on grid testing, I guess in my opinion, might not be worth it if you have recent tests. Now, if you don't have any, you know, within the past 5, 6, 8 years, then definitely I think that investment would probably pay off. That would allow us to do some variable rate spreading.

Chris

Barron: Talk a little bit about removal. I think a lot of times as producers we remove more than we anticipate or more than we thought, and maybe we're under-fertilizing, maybe not meaning to, but we are. And I think, you know, I think you indicated that a little bit earlier before we even started recording, that, that, that is occurring a lot of times. Talk a little bit about how to remedy that situation. What things are we not seeing as producers if we're not putting enough on in terms of just removal alone?

Troy

Deutmeyer: I think one of the things that the grid soil sampling and variable rate technology kind of got us very focused on are almost, you know, blinders on that. We're just using the soil test to make the, make the fertility recommendation. And actually, over the past few years, we've had a lot of customers who have switched to kind of a hybrid of that. We take a look at the soil test. If we need major adjustments, we go ahead and do that. And then after that, we look at the harvest data. And if you're doing a decent job with keeping your yield monitor relatively accurate, you can actually use your yield map and create a variable rate fertilizer application to removal just based off of that removal. Or if you want to build a little bit, or if you are in a high situation, you want to pull down just a little bit, you know, we can do— they can easily do +10, -10, +20, -20, right?

So that's a really good way to keep up, you know, highly productive soils, keep them highly productive. Because you're right, there's been a lot of people that, well, we've been putting on X amount of pounds for 10— last 10 years, and that's just what we do. And as yield levels have gone up, we just haven't, haven't kept up.

Chris

Barron: Yeah, yeah. Because we've seen significant yield level increases, and then that's the conundrum for this year in a lot of areas. There's areas that are not this way, so don't send me 15 emails saying our crop sucks, but there's a lot of really good stuff out there. And I think it's going to— a lot of times as producers, we underestimate what it's going to yield, even in the bad areas too, you know, like, well, it's only going to yield 180 and it yields 210, right? Or whatever. And, you know, on corn, for example, and, you know, we see that with the wheat growers, we see it with the soybean, we see that with almost every crop. You know, the producers, when they're giving us their yield estimates this time of year, and then when the final yields come in, I can usually add 10 or 15% to the yield on average. Because we, we want to be happy when it happens, you know.

But then when you're purchasing the fertilizer on the front end, maybe a lot of times we aren't navigating what actually happened versus what the plan was. So I think that's a key thing.

Troy

Deutmeyer: I think that's very, very common, right?

Chris

Barron: Very common. Another question, um, broadcast P&K, um, we're starting to see more and more of our clients go into strip till. Going to, you know, that zone management type of behavior, activities, management, whatever you want to call it. Talk a little bit about what you're seeing there with different farm operations, and is there enough value in your opinion to getting that fertility in that zone?

Troy

Deutmeyer: I'm, I'm a bit— I'll just— I'm biased here, I guess, maybe, I don't know, but I'm a very big fan of anytime you can ban nutrients. It just seems like, we just get higher yield results. So if I take a look at our Pioneer data and we look at the tillage types, whether it's conventional, no-till, or strip-till, for the past 7 or 8 years, it seems like the strip-till has risen to the top. And part of that seedbed prep and things like that, but I do feel a lot of it is from the nutritional part. And there's a couple, you know, a couple things going on there is, you know, you're putting it where the majority of the root system is, and then whether we want to admit it or not, there is a fair amount of the nutrition that we apply does get fixed up in the soil, in the clays and things like that.

And when you have a high concentration right there, there's only so much that that soil can fix, which means there's more available right there. And so when you're looking at, you know, again, you know, cash flow situations for a year or two, you know, you— the strip-till person could probably reduce fertilizer more than, let's say, the broadcast guy will, even if you're doing tillage. But eventually, you know, you're going to have to pay the debt if you're not— if you're not putting on as much as the crops are moving, you're eventually going to have to pay that. However, we have seen customers where they take over a farm that's extremely low in fertility and start strip-tilling, putting all the nutrients right underneath the plant. They might not be getting the yields that they are in their long-term managed fields, but they're getting a lot closer. With strip-tilling being—

Chris

Barron: yeah, it seems like the strips are a way to fix a, you know, what was a long-term problem, kind of a short-term solution to build back. Um, that's one common thing I, I hear a lot more so from people who don't strip. The assumption is that, well, you can cut back on fertilizer, and the answer is no, right? At least long-term, maybe, you know, and so maybe more term— I agree, right? So the strip-till, you know, just to get confirmation from you is, you know, it's— that's probably a 1 or 2 year thing where you can cut it back because you're moving that zone to— you're moving it, you know, somewhere between 10 and 15 inches back and forth, you know, and going to be putting that fertility right where it needs to be.

Troy

Deutmeyer: Yeah. And I guess just in a couple of examples, you have some going back to some people, you know, taking over some farms that maybe haven't been well managed in the past. It seems like if you're doing broadcast and tillage, They say it takes about 4 to 5 years for that farm to come around. The guy's doing strip till, maybe it might be the first year, but by the second or third year you're really there. It seems like they're maybe 90% up to the yields of the stuff that they've been managing for a long time. So yeah, I'm a huge, huge supporter of Band of Nutrients when you can.

Chris

Barron: Awesome. Okay, getting towards the last couple of questions here. Um, last one. Or two here is, um, how about genetics, um, hybrids, varieties, crops, you know, different crops or whatever, you know, is there, um, a way to manage that or to do some research? And you can pick on corn first as an example, you know, is there certain hybrids that are going to be more conducive to lower fertility environments versus others? Go ahead and hit on that.

Troy

Deutmeyer: Yeah, we were having that conversation before we started, Chris. Be sure that you talk with your seed advisor when you're going, especially going into some of these fields that, you know, are, are low fertility and you might not be given a lot of nutrition this upcoming year, because there absolutely are, are genetics that can handle that much better than others. And just like I said, work with your seed advisor so that way, you know, you can do the best that you possibly can in making sure that you don't put one of those racehorse kind of type hybrids in a low fertility situation and today's genetics, the— our corn breeders make the assumption when they're breeding a hybrid that there's going to be ample nutrition there.

So it's kind of like your equipment dealer assumes that, you know, the air filter and the fuel filter aren't going to be plugged, so that way you can get the, the horsepower out of that tractor. And it's, it's kind of the same way with corn hybrids. And so if, yeah, if you put something out there that wants a lot of groceries and it doesn't get it, it, you know, not only going to use it, lose it in yield, but you're probably going to end up with a situation in the fall where it's not standing as, you know, as well as you want it to be.

Chris

Barron: That's an interesting thing, you know, having the opportunity to talk to a lot of sales reps, um, and, and I saw this the same thing, you know, over the years too, where, you know, one farmer will walk in and say, I don't want any more of that crap. That hybrid sucked. 5 minutes later, the next guy walks in and says, whatever you can do, I want as much of that as I can get. It was the best thing ever. And usually 99% of the time, it's, it's not the hybrid, it's the placement, it's the management and all those things. Any comments on that too? I mean, that's, that kind of ties into this.

Troy

Deutmeyer: Yeah, we spend a lot of time actually, I was just with, uh, a lot of my fellow agronomists yesterday going through hybrids, genetics, what we're seeing. And yeah, it— you need to build a plan. You need to plan your work and then work your plan. And I just— there's, there's different, different data out there, but suggesting that just placing hybrids better than what we do today could probably pick us up at least 5, if not 10 bushels to the acre if we could do a better job of getting them where they can excel. It's just like, you know, putting people on a baseball field. If you put the right people in the right spots, you know, a lot of good things can happen. If you don't put the right people in the right spots, you're not going to have a winning season.

Chris

Barron: Yeah, I, I looked at his analogy like, you know, all of these inputs are on the team, right? And it's just like you said, it's getting all of these things to play together in the most synergistic way possible, for sure. So, um, I think that's all the questions I had. Is there anything I didn't bring up or anything you want to—

Troy

Deutmeyer: one more thing in regards to the hybrid comment is when you're Talking with your seed providers, also seeding rates. Oh yeah, population. Yeah. And it does seem like once we start getting into these lower yield environments, you know, those, um, because of— for even if it's whether it's soil or fertility, a lot of times we just can't handle that population. So a lot of times we actually see a lower seeding rate will actually bring up yield when we're in some of these tougher, tougher situations. And then the one other thing that I would probably comment if guys are looking at taking stuff out that I may encourage them not to is sulfur. And we've just seen over the past few years that sulfur is just becoming so important in, in the nutritional part of both corn and soybeans. And I mean, it's been that way for alfalfa for us for a long time.

And a lot of guys have been climbing, you know, first we started off with 15 pounds as a recommendation, then it went to 20, now it's 30. And, um, you know, let's just make sure that we don't eliminate sulfur. We can, depending on your soil and things like that, history, that, you know, if you want to pull it back, you know, it's kind of that rate of return. You know, you'll get a bunch of return off of those 15 pounds and then maybe not quite as much when you get up to 20, and then 30 is probably where we see the max kind of occur. Um, you know, let's make sure that we keep it at least above 15, if not 20 pounds, at least in, in this geography here.

Chris

Barron: Yeah, I think that's a real key thing. We see that on, you know, our sulfur is going on in our operation with, with the planter, you know, and if you don't turn the switch on or something happens and it's not on, especially in the lighter soils, is where we really see an impact, and it correlates to yield as well. So any final words?

Troy

Deutmeyer: No, wish everybody luck. Yeah, coming year. And yeah, uh, it, uh It seems like things usually turn out better than, than what it appears. Yeah. Hope guys stay somewhat optimistic.

Chris

Barron: Right, right. And, you know, I'm not going to go through the numbers, but we're starting to see a lot of fertilizer prices and we're, you know, we're seeing the highs and the lows. I mean, people can reach out to me and I can give you some perspective if you want to. But what I would say is that, you know, on average, it looks like the, the P&K is similar in price to last year. And I think that's kind of frustrating to people. Which has brought me up to one last question I just thought of is, um, you know, fall applied versus spring applied. You know, some of these people are like, well, I don't have the money tied up, I'm not going to sell the grain, I don't want the expense. And, you know, there's going to be some of that too. Any, any issues with the fall applied versus spring applied other than trying to manage the weather in the spring and not compact stuff?

Troy

Deutmeyer: So that's generally where I come back to. I know there may be some data that will support that the closer you apply that nutrient to when the crop's going to need it, there's less chance of that soil fixation that we talked about earlier. And then there's some data that shows that there's no difference. But I think the big thing comes back to Chris is just getting your workload done. And then the soil compaction part, I mean, we're still seeing the sins big time, soil compaction from this past year where fertilizer buggies were out there in borderline conditions and, and, uh, it's, it's costing a lot of bushels.

Chris

Barron: Yeah, I mean, you can have the fertility there, but if the plant can't get to it, doesn't do any good. So absolutely right. All right, hey, um, again, really appreciate it. Really appreciate you being here too. That worked out really good to have this conversation today. And absolutely, we'll, we'll get you back again as we get into harvest and start seeing some things that are going on. And if any other topics come up, we'll get you back again too. So really appreciate it.

Troy

Deutmeyer: All right, sounds good. Thanks, Troy.

Chris

Barron: And again, thanks everybody for listening. And if there's anything else that you want us to be hitting on business-wise, agronomy-wise, whatever, reach out, let us know, let us know how we're doing. And with that, thanks everybody, and we'll catch you again next time on the iView pitch.

Troy

Deutmeyer: Never could believe the things you do to me. I never