Is hail insurance a cost or an investment?

Depends on how you look at it.  If it hails, “It was a wise investment.”  If it doesn’t hail, “It sure cost a lot of money!”  You see, the difference is in how you view the insurance based on what you want it to do for your farm.  The argument could be made for either scenario or that the hail insurance is both a cost and an investment.

The thing about hail insurance is, after the crop is in the bin, the only residual value you have from your “investment” is that your premiums may slightly decline next year.

As farm professionals, our goal should be use good management to reduce the yield fluctuations between good and bad years while at the same time increasing overall crop incomes over time.  Proper crop nutrient planning is essential for this to occur.

This leads to the question, “Is fertilizer a cost or an investment?”

In most conversations fertilizer will tend to be referred to as a “cost”.  In my former life as a fertilizer dealer, I never had a grower ask me to “help him design an investment strategy based on fertilizer inputs.”

Investment strategy discussions are saved for the RSP account manager but certainly not for the fertilizer agronomist.

This is why the relationship between the grower and the fertilizer “salesman” tends to be more on the antagonistic side.  The sales person feels he is there to “tell and sell.”  The farmer feels he is being “sold” something he knows he needs but doesn’t want to buy – - just like hail insurance.

If the salesman says, “You really should be applying 3 lbs. of copper for that barley crop,” the grower is thinking this guy must be getting extra commission for selling copper and says “no way, do you know how much that copper costs?!”

Often this relationship does not work because the two individuals are on opposite sides of the desk.  The fertilizer salesman should try to “sell” or “tell,” but should also“ask” the grower what his goals are for the crop and then define a strategy for achieving these goals.  The agronomist and grower should be on the same side of the desk.

The reason this does not happen is because often the salesperson has not asked the farmer, “What is your fertilizer philosophy?”  To which the grower might scratch his head and say, “fertilizer philosophy…what do you mean by that?”  This could be a big part of the problem.  Some time needs to be spent thinking about your fertilizer philosophy so you can make better decisions about how to implement a nutrient strategy for your farm.

Believe it or not, we all have a fertilizer philosophy.  It will fall into one of four categories:

Feed the crop.
Feed the soil.
Feed the crop and slightly build the soil over time.
Don’t feed the crop, the soil or the fertilizer dealer & let the grandkids worry about it!

You may laugh, but even if you have never thought about it, you have to fall into one of these four categories.

The philosophy you choose will be dependent largely on where you are in your farming career and what your land tenure situation is.

If you own the land you should not only be concerned with growing a crop, you should also be concerned about the health of the soil.  Land ownership or long-term lease arrangements lend themselves nicely towards long-term nutrient strategies.

For example, if copper is needed, you may decide on a program to build the soil levels all at once by broadcasting 6-10 lbs./ac of granular copper (philosophy #2).  While expensive, this is a valid strategy that will correct the deficiency in one year even though it took 50 years to deplete the copper levels in the soil.

Researcher have demonstrated that a “one-shot” application of copper at 6-10 lbs./ac will satisfy the copper demand in the field for 5 or more years.  In a situation where copper is extremely deficient, the “investment” pays for itself in 1-2 years.

Philosophy #3 dictates that you may decide on a long-term program where you add copper at the rate of 1.5 lbs./ac/year for 3 to 5 years.  This would build the soil levels over time while still providing nutrition for the crops being grown annually.

In either case the net result would be restoration of the copper level to a point where it would no longer be a limiting factor.

The “feed the crop” philosophy (#1) is based on an understanding of nutrient removal levels by the crop given the targeted yield and in consideration of the “soil chemistry” in the field.

Growers who have short-term leases are often interested in just “growing the crop”.  Little attention is given to a long-term strategy, as you are unlikely to make an investment in a soil in which you do not have a vested interest.  Some landlords think that by keeping their renters on a short chain they have better “control” over their land when the reality is that renters with short term leases tend to “mine” the soil by being totally focused on the crop and not the soil.

A “feed the crop” philosophy also makes sense where you are fighting the soil for nutrient availability.  For example high organic soils tend to tie up copper making a foliar strategy a good one to follow.  In high pH situations, soil applied manganese is difficult to keep available for the crop and here too, a foliar strategy can make plenty of sense.

And finally, there may be instances where the choice is to simply do nothing about feeding the crop or the soil. This is where philosophy #4 comes into play.

No matter where you are farming or what you are growing, you need to spend time thinking about what type of fertilizer philosophy your intend on following for your land base.  Looking at fertilizer from such a standpoint will help guide you in your decision and management processes.