Farming Podcast | Fertilizer in 2027: Take a Scalpel to Your Nitrogen

00:00 Fertilizer predictions and recommendations, the practical stuff, the on-farm stuff. We're not talking about markets and hedging. 00:00:06 We're talking about how you can survive in 2027 and what strategy you should deploy for your fertilizer. We're doing that with TitleGrow's Galen Behr in this awesome 00:00:15 episode of XtremeAg's Cutting the Curve. Welcome to XtremeAg's Cutting the Curve podcast, where real farmers share real insights and real results to help you improve your farming operation. 00:00:28 And now, here's your host, Damian Mason. Hey there. Welcome to another fantastic episode of XtremeAg's Cutting the Curve. We're talking about fertilizer. You know you are in the business of production 00:00:37 agriculture. It's been volatile. That's always the word. Oh, the markets are volatile. Okay, what we got going on is China, Russia supply us 00:00:45 a whole bunch of stuff. We've got a war going on in the Middle East. Fertilizer has its basis in petroleum products. 00:00:51 We have a lot of volatility, and you're getting a lot of different mixed signals. I know that your prices have gone up, then there's the whole sulfur issue. 00:00:58 Well, I wanted to put this episode together with TitleGrow's Galen Behr, who farms in the panhandle of Oklahoma. He also gets around the entire country in his job 00:01:05 with TitleGrow. And what we're talking about here is real, live, practical thoughts as you head in. We're recording this in the fall of 2026. 00:01:13 You don't have to make all your decisions now, but you better sure as heck be thinking about it. What are you looking at for 2027? 00:01:19 China produces, I just said it in a stat here, China produces, what, about a third of our nitrogen and 00:01:28 more than half of the world's phosphates. You've got the issue with Canada, decided that they're mad at us, elbows up, according to their prime minister, because they're going to stand up to the orange 00:01:37 man. So I don't think we've gotten into a problem with supply from Canada yet. And then we've got the Russia situation. 00:01:42 Russia started holding back fertilizer this very year, and they're a major global supplier. So we've got supply issues, we've got price pressure, and we've got 00:01:52 volatility. Yeah, Damian, you alluded to a lot of the contributors there. You and I have talked long enough, and you work in this industry enough. 00:02:03 You know what creates the volatility, and whether China goes offline, Russia doesn't sell it into the market, whether Strait of Hormuz affects the sulfur. 00:02:13 Let's just be honest here. We are in an unpredictable market because we don't fully know what fertilizer infrastructure has been destroyed around the 00:02:24 world. We don't understand all the politics in the background. So before we hopped on this call, I said the prediction for 2027 is 00:02:33 unpredictability. And that's just the world we're living in right now. What's the deal with sulfur? I've been reading about it, and we're going to 00:02:45 hear more about this, I would think. So what are we talking about here? What's the deal with sulfur? 00:02:51 Well, sulfur supply, to a large degree, it's a byproduct of any sort of fossil fuel manufacturing. And we all know that we used to catch that out of the atmosphere. 00:03:06 I think I saw the other day we've reduced sulfur through electrical generation by 96 or 98%. It's almost nonexistent. So we're buying that now. 00:03:18 And the Middle East conflict, regardless of whether we actually get our sulfur here, it is disrupting refining, and it's disrupting the movement of 00:03:29 things like sulfuric acid and elemental sulfur. And even if we could make enough in the US here to supply our needs, the rest of the world wants it too. 00:03:42 And they're going to come shopping for it here, which is going to create competition when it comes to the US farmer needing sulfur. 00:03:50 And we've identified that that is a nutrient that we definitely need to be addressing and investing in. 00:03:57 So we got, and I'm going to get into the recommendations you have, but as far as predictions, Brooke Rollins was on Mike Rowe's "The Way I Heard It" podcast a few 00:04:06 days ago or a week ago, and I have been listening to it. But she is touting, because that's what you do when you're in a government role, 00:04:14 that the United States is taking government money, taxpayer money, and deploying it toward helping us become more fertilizer self-sufficient. 00:04:25 And there's going to be, I believe, a nitrogen plant built in Louisiana, and there's hundreds of millions of dollars being tossed at this whole issue. 00:04:32 And of all things, man, okay, should the government be involved in fertilizer business? No. But also, we got a reality that we're disrupted. 00:04:44 Wars have disrupted it, embargoes, boycotts, tariffs. We've been watching this. You and I are old enough that we've been watching this since 1979. So it would not be a bad thing if this were 00:04:58 to happen. But the idea that we're going to become fertilizer self-sufficient still is a little bit, shall we say, a pipe dream. 00:05:05 And also, not to mention, I think you can build a pole barn in about a month. I don't know that you can build a nitrogen production facility of any scale in, 00:05:14 you're talking, a couple of years. So this problem doesn't get better anytime soon, right? Yeah, I think you're optimistic at a couple of years. 00:05:26 I would peg it between five and 10 years. Honestly, to get everything in place, the permitting, all the construction, none of that happens. Can you fast-track it with incentives from the government? For sure. 00:05:40 But I'm of the belief, yes, that's been advertised, but look, if we had a dime for everything, whether it's a refinery or manufacturing 00:05:52 that is advertised to be built that never gets built, we would probably have a decent chunk of change because they like to publicly announce these things. They never come out and say that never happened. 00:06:06 But the reality is, hopefully we do get more nitrogen manufacturing. I do think that's needed. I think on the other flip side of it, what do we do to 00:06:17 stifle demand a little bit while we're going through this? And I think that is somewhere that the 00:06:25 American farmer can have a little bit of control over his situation is just realize that he's probably going to have to get the scalpel out when it comes to managing 00:06:34 his nitrogen needs. Okay, so that's where we're going next. So your recommendation, we're making this very practical. 00:06:40 You and I just talked big picture about what's happening. We don't see this fertilizer issue getting any better immediately. 00:06:46 Again, when you're talking about Russia and China being two of the big global contributors, and obviously the Middle East, not one of those 00:06:55 situations looks positive right now. So with that being the case, that means that we've got a reality that there's going to be elevated prices, there's going to be pressure on 00:07:06 supply, and here we are. So what's your recommendation? Put on your farmer hat, so to speak. Yeah, first of all, God, this is going to be hard, but the emotion has to get 00:07:20 taken out of this circumstance. And we cannot predict what all the geopolitical things that are going to happen. 00:07:29 I will tell you as an industry, and you know me, Damian, I've lived in this industry forever. It's hard as an industry not to latch on to that and 00:07:39 start creating urgency, because what does that do? It takes out price sensitivity. And after college, I did investment banking for a while. 00:07:49 We live for interest rate changes and any sort of volatility that we could get our hands on because it forced people into decisions. 00:07:57 And that's what the industry's going to do, and I'm just going to recommend to farmers to take a deep breath, put a pen to paper. 00:08:04 Because when the Middle East conflict broke out this year and nitrogen skyrocketed, I saw a lot of social media 00:08:14 communications that said, "Well, if farmers hadn't locked in their fertilizer needs by now, well, shame on them." Well, you know me, I set guardrails, 00:08:24 and my guardrail is 20% of expected gross revenue for total fertilizer budget and roughly 50% to 55% of that for nitrogen. 00:08:33 And even as far back as last fall, we were sitting at 65%. I don't blame a farmer for not having committed last fall. 00:08:42 The dynamic in the market didn't tell him to. He had no idea that he was going to wake up one morning and the Strait of Hormuz was going to be an impact. But that's what he was dealt. 00:08:52 And already this fall, we're sitting at, if you ran the numbers for 2027 corn, we're sitting at the potential for nitrogen to be 66% of a farmer's 00:09:03 fertilizer budget. Not much he can do about that except, okay, go, "How do I get that down?" Well, he doesn't control price, so he's got to control how-... 00:09:11 how much he's applying and how he's applying it to get the most out of it. And we're focusing on nitrogen. I didn't even touch on the other nutrients. 00:09:20 Got it. So yeah, we're focusing on nitrogen, and then the other part of it, and this has been discussed a lot, Kelly Garrett here with XtremeAg has been on a 00:09:28 nitrogen reduction crusade probably for three years now with all his different trials, and I think it's great that we're doing that. 00:09:34 And then there's also the reality, when you were here at my farm last year with Tidal Grow, did the plot down the road at one of my fields, and we discussed the 00:09:41 fact that we've generally over-applied nitrogen. And we had our guy here that took a sampling, and we were way more than adequate, and there was, in fact, excess nitrogen in the leaf tissue samples of the corn 00:09:52 field that we sampled down here. We've over applied this stuff forever. So I think the first and easiest answer is, it's kind of like when everybody says, 00:10:02 "Well, I'm obese. What should I eat to lose weight?" I'm like, "You're looking at it all wrong. What should I eat to lose weight? 00:10:14 What should I not eat?" The first easiest thing is just cutting back. That's the way I look at nitrogen. We're obese on our application of nitrogen, 00:10:22 probably to the tune of 30% to 40% to 50% more than is required. So I'm not the farmer. I get it. I'll have somebody send in hate mail. 00:10:30 "Well, you don't understand. You rent your farm ground out." That's true, but I've grown up doing this, and I'm at these events all the time. 00:10:37 I think the easiest first answer is just cut back. Just cut back. And we've been conditioned to not do it because of the fear factor. 00:10:45 Not that the industry isn't partly to blame for this, telling the farmer, "Well, if you don't put out 1.2 pounds of nitrogen, you're going to lose your a*s." And we 00:10:55 don't think that's true. No. And again, you and I talk about this sort of stuff a lot of times when we're not doing podcasts, but one thing you've heard me say is that the 00:11:08 reason people over inventory or over apply nitrogen in the fall or spring is, let's just say on my farm I'm going for 240 bushel to the acre corn. 00:11:19 Can I say when I'm applying nitrogen if I'm going to get 240? No. There's a little piece of me in the back of my head that says, "No, you're going 00:11:28 to get 280." Well, then you start questioning yourself. Well, if I'm going to put on eight tenths of a pound of nitrogen at 240, what if my potential's 280? And so you end up applying extra because the 00:11:43 right amount of nitrogen is always a rear view mirror answer. I'll tell you next September, Damian, whether I applied the right amount of nitrogen. 00:11:54 So if we want to cut back and be responsible, we have to set a realistic yield goal for that person's farm. 00:12:03 And then once we've done that, we have to say, "Okay, how do I get the most out of that?" And obviously, you know this, at Tidal Grow, we have some really cool tools 00:12:14 to help accomplish that. Our newest one is our LineIn. Why does it matter? Well, if you're going to take a scalpel to your nitrogen program, plan B, in case 00:12:24 you do have potential for 280 or maybe just had some weather events that made your nitrogen you applied less efficient, you've got to be able to go in there and 00:12:34 correct that. And that's where an easy-to-add product like a LineIn with your herbicide, your fungicide, that's where it starts entering into the equation, and 00:12:44 that's part of that being responsible with not only your economics but your nitrogen rate for the downstream consequences. 00:12:55 There's obviously LineIn. There are other products that have the promise of allowing you to reduce nitrogen, and like you said, the benefit there is you can do 00:13:06 it at a point in time. Biggest mistake that I see in these producers, throwing out not only excess fertilizer that you don't need, but putting it out all... 00:13:17 Matt Miles said that in one of our recordings years ago, he's like, "Well, do you eat all your meals for a month on the first day of the month?" Well, no. 00:13:28 You need the nutrition every day throughout the month, and same thing with your crop throughout its season. So putting out a bunch of fertilizer in April, or worse 00:13:35 yet, in October, thinking it's going to be there in July when it's grain fill time is asinine. What about on the other front here, I'm going to make one big 00:13:43 prediction at the end, but as far as recommendation, you think, obviously, take a scalpel to it. So is it across the board? 00:13:49 Do you think you could live with reducing your fertilizer spend, certainly on nitrogen, by reducing it by 25%, 30%? What about the others? 00:13:57 Yeah, that's what we- What I've learned with XtremeAg is the macros never get applied. I'm sorry, the micros never get applied the way they should, and the macros always 00:14:05 do. Yeah. Take 20% off of your macro spend, and then add 5% on your micro spend, and maybe you end up all of a sudden saving a whole bunch of money, and you don't 00:14:14 sacrifice anything. Yeah, that's kind of the key there is, if a guy's target nitrogen rate was 200 pounds, and we're looking at a volatile nitrogen market, I would 00:14:27 rather see that guy go in and apply 140 or 150 pounds of nitrogen and throw in some sulfur, and then based on soil test, phosphorus, potassium, micros, whatever he needs. 00:14:42 Because what that does is that leverages the 150 pounds to perform more like 200 pounds. And 00:14:52 in terms of crop fertility, if you front load your nitrogen, my saying that I've said in the past is nitrogen is almost the dessert for a 00:15:04 crop because it's easy to consume. Nitrate nitrogen just flows passively in with the water. And so what will happen is that crop, it will consume nitrogen, and it will not 00:15:16 consume anything else, and especially if you're not applying it in the ways that need to be applied. And so what happens is you end up with that imbalance, and you 00:15:25 actually get a crop that sort of becomes addicted to nitrogen at that point. And so you've got to have that balance in your fertility program. 00:15:36 And you and I've talked about it. Take the emotion out of it. Sit there and say, "I got to cut my nitrogen back so that I'm within a manageable 00:15:46 range of what I'm going to apply, or do I spend that dollar?" And that's where the soil test comes in and really starts to help you out. But you can't just continue. 00:15:57 Look, if you're at a buffet and you start out eating a bunch of coconut pie and the broccoli's at the end, guess what you don't eat? 00:16:07 Yeah, right. And that's kind of like how crops consume nutrients a little bit as well. Got it. So I haven't heard that before. There you go, coconut pie or broccoli. 00:16:16 You know what? You just named two things that I probably wouldn't eat off the buffet, period. So why 00:16:22 don't we look at this, the prediction and the recommendation? So from a recommendation standpoint, you're saying cut back on everything. 00:16:29 And then you talked about soil sampling. The one thing that I would hear from people like our friends at Calibrated Agronomy and Evans and Kelly and all them is, "You know what? 00:16:39 Don't worry about the soil test right now when we're so at these fertile... Worry about this tissue." And worry about the tissue, and then what's happening 00:16:47 inside that plant, and then obviously using products, and we have more array of products than we've ever had that could be applied May, June, July, August, even 00:16:55 late season stuff. So I think that's where the money saving's. The only problem is it goes against what most farmers have gotten comfortable in 00:17:02 hitting the easy button and just going applying a whole bunch of stuff in bulk at a certain point. 00:17:08 Damian, I'm still going to recommend, maybe it doesn't have to be an every year thing, but I'm still going to recommend that that guy is going to pull a soil test. 00:17:15 So if you haven't in a couple years, or if you've done something major, you limed or you spread manure, it's always a good idea to go soil test and see what you got 00:17:24 out there. But the soil test is going to help you predict your efficiency of your fertilizer. If you're high magnesium, you already know your 00:17:35 nitrogen's being placed out into a less sufficient environment. And the other thing is that calcium, while the crop doesn't use a bunch of it, 00:17:45 I compare it to a bouncer at a bar that's dictating who goes in and out of that bar, and calcium kind of performs that function. 00:17:55 If you don't have adequate calcium in the soil Sometimes the rest of your nutrition suddenly loses its efficiency because that calcium is like that bouncer 00:18:06 standing at the door of the bar. Right. It's saying, "Hey, potassium, your turn to come in. Hey, boron, it's your time to get in here." And so it does 00:18:17 regulate other nutrients in and out of the plant. So it's not like a soil test is worthless. Tissue test in season, absolutely. But let's 00:18:28 get some predictability to our situation with that soil test. So in general, what I've learned in my five years with XtremeAg is that you 00:18:36 probably can cut back on bulk fertility if you get your micros more dialed in, which most people overlook the borons and the zincs, et cetera, et cetera. 00:18:43 Kelly once pointed out that he pulled, I don't know, some ungodly thing, 1,000 samples, and every one of them was zinc deficient. 00:18:49 And so you're talking to somebody that's still pretty top of their game and is realizing that. So is it safe to say that most producers probably are in some sort 00:18:57 of a deficiency on micros? Yeah. Definitely, because originally we never applied them, Damian. Yeah. And then now as our yields have gone up, we probably aren't applying enough to 00:19:09 catch up with where we're at in yields. And then you look at it, look, I could sit here on this podcast and make copper the enemy of the state, or I can make it a beneficial nutrient. It can be both. 00:19:22 If you get too much out there, yeah, it starts to work against you. But I will tell you, an adequate level in the soil helps. 00:19:29 The challenge is a huge amount of copper right now is being consumed by data center construction. So now we have a nutrient we'd love to have, we have a competing use 00:19:39 of that nutrient, and a farmer goes, "Holy cow, that copper is expensive. You know what? My decision is don't use any." I'm not saying I can blame the guy, 00:19:48 but I'm also saying that if you get your scalpel out and you're smart about it, you probably can fit it somewhere into your program. 00:19:57 Last thing, we gave some recommendations. So check your calcium level, do pull your soil samples, do tissue sampling, get your scalpel out, cut back on nitrogen. It's the easiest one. 00:20:07 It's your biggest spend. You're probably putting it out there and it's doing you no good. And obviously, check your micros. 00:20:12 I think that's pretty much on the recommendations. Any other recommendation before we go to your final prediction? I've got a final prediction. 00:20:21 Yeah. I want guys to be able to check their tendencies. I do this all the time when I go into a store. I think why did I buy that or not buy that? 00:20:33 It's just one of those things that you do. The other thing I would always recommend to guys to do is to have good self-awareness over your tendencies and fight those. 00:20:42 And the other thing is look at your farm and see what you are able to do. I could make a case on my farm. I should go Y-drop. 00:20:50 By the time I Y-drop, I'm in the Oakland Canyon. I got sprinkler tracks knee-deep. I'll get a Y-drop rig stuck out there. 00:20:59 Yeah. So at that point, my point to this is be smart with your spend and also align your habits with what you can 00:21:10 manage. And that's why, as we talked earlier, LineIn, we've tried to make it easy to align with. We know everyone's applying herbicides. 00:21:18 We know almost everyone's applying a fungicide. We're trying to simplify that for guys. Yeah, you can run that. And speaking of which, if you want to learn more about 00:21:26 LineIn, check out the stuff that's happening with TitleGrow and including my trial down here. We did a thing with the LineIn and with also their product Spectra. 00:21:35 So you can check out the videos at XtremeAg.Farm. We've recorded four or six videos. Different folks like Galen have been here, some pretty cool stuff. 00:21:43 Also want to remind you that if you are a farmer, and you probably are if you're listening here to XtremeAg, imagine knowing what your soil is as well as you. 00:21:49 If you know your soil as well as you know all your fields, with Earth Optics, you can get the most precise soil insights in the industry, clear, accurate data on 00:21:56 fertility, biology, and compaction. No more guessing, just the information you need to make smarter decisions, optimize input costs, and boost your yields. 00:22:02 Earth Optics puts the full picture of your soil right in your hands so you can farm confidently and profitably, unlock healthier soil, stronger harvest, and a better 00:22:10 bottom line. Go to Earth Optics. Earth like the planet you live on, optics like your eyeballs. Go to EarthOptics.com. So here's my prediction. 00:22:19 As long as farmers b***h but don't make an adjustment, which we know that this happens sometimes. As long as they're complaining about the prices and saying that the fertilizer is 00:22:30 all controlled by oligopolies, and maybe it is, and also not to mention three of our adversarial countries. As long as they complain, but don't change their habits 00:22:40 and continue to do the exact same practices and buy the same stuff, it's a very easy prediction to make that prices will remain elevated just like they are right 00:22:48 now. Because as long as that seller realizes you're complaining but you're not changing your behavior, your price will stay the exact same. 00:22:56 And that's why the most power you might have against our adversarial countries or these oligopolies is to change your farming practices as best you can to 00:23:06 become less reliant on them and the stuff that they are elevating these prices on. That's my prediction 00:23:13 and recommendation. My prediction and recommendation. If you don't change your habits, the fertilizer prices are going to stay right where they are. 00:23:20 I would agree with your prediction, Damian, and part of that is... And I don't even know if they'll come down if you do change your habit, what will 00:23:26 happen. All it does is it makes it a little bit better on your bottom line. Yeah. You can't change global markets. All you can change is what's happening on your 00:23:36 operation- That's it ... as a businessperson. Control what you can control, because I'll tell you what, if your strategy to a year like this is just complain, what happens is the complainers that don't make 00:23:48 adjustments unfortunately get taken over by the people that said, "I'm not going to complain. I'm going to put a scalpel to this and I'm going to make an adjustment." 00:23:58 That's just how the market works. So please control your destiny to the extent that you can. 00:24:06 Force yourself into some decisions that you haven't had to make before. Make sound fertilizer decisions. 00:24:15 Don't cut out everything except nitrogen. That's not the right decision. Just be thoughtful about how you approach the year. 00:24:22 And by all means, seek reliable counsel in that decision. I like it. He's Galen Bear. The company's called TitleGrow. 00:24:29 If you want to learn more about their company and the awesome stuff they're doing, again, you can go and check out all the videos at XtremeAg.Farm. 00:24:36 Also, you can learn more about their products like a LineIn by going to TitleGrowAg.com. 00:24:42 Am I right about that, Galen? TitleGrowAg.com. That's sort of like- Like a big wave of water, Title. Like a big wave of water, Grow. 00:24:49 Like what your children do, Ag. Like the industry we all work in, TitleGrowAg.com. Till next time, he's Galen Bear, I'm Damian Mason. 00:24:54 Thank you so much for being here for XtremeAg's Cutting the Curve, helping you farm better. 00:24:59 That's a wrap for this episode of Cutting the Curve. Make sure to check out XtremeAg.Farm for more great content to help you squeeze 00:25:06.558 --> 00:25:09.138