Farmers visiting the office recently have been discussing fertilizer prices compared to other years. It seems that every spring, fertilizer prices increase over the previous year's level.

It always seems like there is a reason to support those price increases too. One time it might be high natural gas prices, since it is used to make fertilizer. The next time, you might hear that China is buying all the fertilizer it can get, causing domestic prices to increase.

Then maybe high fuel prices increasing transportation costs are supporting higher fertilizer. Maybe barge or rail traffic contributes to higher costs, due to delays unloading or a labor strike — the list seemingly goes on and on. The bottom line is that each year the fertilizer industry seems to find a way to support increasing prices or at least rationalize price increases.

This year is no different, only the price increases are unbelievable. Producers can only spread so much manure and then they need to apply fertilizer to support yield goals for various crops.

Many producers do not even have the option of manure application as they no longer own livestock. It used to be that farm publications warned farmers not to over apply fertilizer as it contributes to water quality issues. Well, at today's prices, no one will be over-applying commercial fertilizer without the risk of going broke.

A recent survey of fertilizer prices ranged from $375 to $500 per ton. It all depends on the analysis, delivery and whether its bagged or bulk. Let's just assume a $440 per ton average cost that could translate into $75 per acre expense for just fertilizer, not counting the application cost. It would all depend on the crop. Some will require significantly more than other crops.

Producers who have not yet done so may want to soil test before finalizing fertility plans. Although it is getting late, there is time to do so if it is done as soon as possible.

Some people are hearing that since grain prices have increased, grain farmers will be making money this year. I would not argue that the possibility exists, although with significantly higher input costs there is a lot more risk than normal. This is especially the case with borrowed money; just consider fuel, parts, seed, fertilizer, time, labor, equipment, herbicides etc. It is easy to understand why profit margins are the same as any other year.

Now if the Corn Belt were to experience excessive wet or dry conditions during the growing season, then look out. Prices could explode for corn, soybeans and all other grains.

At this point producers need to assume a good crop nationwide, which could actually depress prices, causing more concern with cash flow margins. It all starts with input costs (fertilizer, fuel, seed, etc.) and each producer's cost of production can then be computed.

Luke Fritz is executive director of the Butler County Farm Service Agency.