The Benefits of Prepaying Fertilizer: A 5-Year Reflection

Aug 09, 2021

Pre-paying fertilizer in the late summer/early fall has many benefits for the buyer. Fertilizer prices generally increase in the winter/spring, so locking in a price gives you the opportunity to save money on what is often the lowest price of the season. Pre-paying fertilizer in the fall also allows UFC to do better planning and forecasting which results in fewer in-season supply issues. On average in the past 5 years, pre-paying fertilizer in the fall on your N-P-K had savings around $9 - $16/acre.
  • Average 5 year savings by pre-paying anhydrous (NH3): $4 - $5.50/acre
  • Average 5 year savings by pre-paying MAP: $3 - $6.50/acre
  • Average 5 year savings by pre-paying potash: $2 - $4/acre
These savings are often much greater than the cost of interest. Estimated interest costs this year are approx. $10-12/ton for 6 months of interest. At least 80-90% of the time, prepaying works out to the grower’s best interest. Occasionally, prepay prices are higher than in-season, but for the growers that are in a planned prepay schedule, here are their annual savings on average (highs and lows together).
  • Average 5 year savings per ton by pre-paying NH3: $47/ton
  • Average 5 year savings per ton by pre-paying MAP: $58/ton
  • Average 5 year savings per ton by pre-paying potash: $40/ton
Every year is different, and without perfect knowledge no one can ever predict what the markets will do perfectly. Our intel at this point is telling us that fertilizer pricing is going to continue to rise into the fall and winter, and it appears to be a good opportunity to lock in fertilizer costs in the next few weeks before prices rise again.

Need a Better Agronomy Input Financing Option?
With approved credit, ask your UFC Agronomist if you might apply for Secure financing through Winfield United to finance your seed, chemical, and fertilizer needs. If you choose to finance fertilizer through Secure financing, you could potentially lock in a prepay price in September and not pay in full until Feb 2023! (Restrictions apply.) Ask your UFC Agronomist for more details.

Deferred Fall Fertilizer Program-Apply it Now, Pay For it Later!
Any fall-applied NH3, dry fertilizer, lime, and application costs not prepaid can be deferred to your December bill and not due for payment until Jan 20, 2022. In order for us to do a better job of serving your fertilizer needs efficiently, it’s important we do a lot of work in the fall, especially dry fertilizer/lime spreading in October to make the most efficient use of our fleet and take pressure off of spring fieldwork. Help us serve you better in the spring by turning us loose to go spread your dry fertilizer and lime right after harvest and have the freedom to not pay for it until either side of the new year.

5/10/5 Retail Fertilizer Program
United Farmers Cooperative is also offering a 5/10/5 fertilizer program for retail customers where you can save an additional $5 - $20/ton on your contracted MAP and potash by following some of our best management practices. These are products/practices that have proven to provide a good return on investment for our growers through UFC local testing over several years.  
  1. Sulfur and Micronutrient Program: save an additional $5/ton on MAP and potash if you apply at least  10+ lbs/acre of a Microsync product (Microsync Supreme or Pro) and 17+ lbs/acre of actual sulfur (Tiger Sul or AMS) in a 2 year fertilizer spread. Feed your crop with needed Sulfur and key micronutrients like Zinc, Manganese, and Boron to set your crop up for success!
  2. Avail Phosphorus Efficiency Program: save an additional $10/ton on your MAP + Avail if you stabilize contracted MAP with Avail, a phosphorus fertilizer enhancer to give you greater P efficiency in the year after application. Get 70-80% of your applied P available to your crop the first year instead of only 20-25% when using Avail!
  3. Removal Rate P and K Program: save an additional $5/ton on Map and potash if you apply at least 100+ lbs/acre each of actual P and K in a 2 year spread. Keep your fertilizer bank account in the BLACK and out of the RED by applying an appropriate removal rate for your crops’ yield goals.
Contact your UFC Agronomist to learn how we can help you do more with your fertilizer investment!

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