Nitrogen Price and Fertilization Decisions - Examples from the Central Great Plains

Nitrogen Price and Fertilization Decisions:
Examples from the Central Great Plains

Mike Stewart, Rob Mikkelsen, Kevin Dhuyvetter, and Alan Schlegel

Questions about the effect of nitrogen (N) fertilizer price on optimum rates of application are coming up again, just as they did early in 2001. This is the result of a recent spike in natural gas prices. Natural gas is a feedstock for N fertilizer production, therefore natural gas price directly affects N fertilizer price. Anytime fertilizer prices increase, farmers and ag suppliers begin to wonder how much, if any, to cut back on rates of application. Research has shown over and over again that while fertilizer price affects economic optimum rates of application, the effect is not as great as one might expect. Examples follow for winter wheat and irrigated corn in the central Great Plains.

Winter wheat

Adequate N must be available to the wheat plant at all phases of development. Shortages of N will ultimately result in reduced tillering, reduction in head size, poor grain fill, reduced yields, and low protein content. Optimum rate of N application will depend on factors such as residual soil nitrate level and the yield potential of the environment. Splitting applications of N in wheat production is common over much of the Great Plains and other wheat producing areas. Many wheat growers are approaching the N topdress season, thus the question of how much N fertilizer price increases will affect optimum rates will be common over the next few weeks.

Scientists at Kansas State University have investigated the effect of N fertilization on dryland winter wheat yield in western Kansas. This study was conducted on six farmer field sites over four years. The typical cropping system was wheat-fallow using reduced tillage practices. Rates of N fertilizer application ranged from 0 to 100 lb/A (20 lb increments), and two methods of application were evaluated…broadcast and spoke injected. A production function that took into account N fertilizer rate, residual soil nitrate (0 to 24 in.), surface residue, and method of application was derived from the data collected over the course of this study. Table 1 shows wheat yield estimated from the production function at N fertilizer rates ranging from 0 to 100 lb/A (injected), soil nitrate-N at 40 lb, and surface residue cover of 28%.

A particularly interesting aspect of this work was the analysis and determination of optimum N rate. Table 2 shows the effects of N and wheat price on profit maximizing N fertilizer rate. At a wheat price of $3.25/bu, when N price is increased 133% (from $0.15 to 0.35/lb N) the optimum N rate decreases by only 21 lb/A, or 25%. The relative difference in cause and effect is tremendous. In other words, N price (cause) can undergo large shifts that result in relatively small changes in optimum N rate (effect). Similarly, crop price has a relatively small impact on optimum N rate. At $0.20/lb N, a decrease in crop price from $3.50 to 2.50/bu results in a decrease in optimum N rate of only 8 lb.

Corn

Irrigated corn research in western Kansas has shown similar results. Figure 1 shows the effect of corn and N fertilizer price on optimum N rate based on 30 years of production data. At $2.30/bu corn, when N price goes from $0.15 to 0.35/lb the optimum N rate is reduced by only 13 lb/A (157 to 144 lb N/A).

Adequate levels of other nutrients such as phosphorus (P) must be available to the crop to maximize N value and N use efficiency. Figure 2 illustrates the importance of balance between N and P nutrient inputs. In this example, P fertilizer increases N use efficiency in the long-term irrigated corn study. The maximum corn yield that N could produce without P was 131 bu/A, while with P (40 lb P2O5/A) it was 186 bu/A. The difference in N rates between these maximum yields was only 6 lb N/A. The economic impact of nutrient balance is clear, but what may not be as clear are the environmental benefits. After 30 years of production, nitrate-N in the upper 10 ft of soil was reduced by 66% where P was applied yearly compared to where no P was applied (Figure 3).

Here are a few thoughts to keep in mind regarding N price and fertilization as we progress into the 2003 season.

Don’t let increases in N fertilizer price lead you to make unprofitable decisions. Remember that fertilizer price does not have a dramatic impact on profit maximizing yield and optimum N rate, thus significantly reducing N rate due to higher prices can lead to larger economic losses.

Take into account all sources of N. Residual soil N can be determined by a soil nitrate-N test. Accounting for residual N is especially important when the price of fertilizer N is high. Local extension personnel can provide more information on best sampling methods. Credits from other N sources such as manure and legumes should also be taken into account.

Make sure that other nutrients are in adequate supply. A well-balanced fertility program that includes sufficient levels of all nutrients ensures that the use efficiency of N fertilizer and other inputs will be maximized. This is important from both the economic and environmental standpoints.

Use best management practices (BMPs) appropriate for your operation. Factors such as fertilizer placement and timing can dramatically affect N as well as other nutrient use efficiencies.

Proceed with confidence. Once a decision has been made to plant a specific crop, resolve to achieve yields that will produce the highest profit.

Figure 1. Effect of N and corn price on optimum rate of N fertilizer applied to irrigated corn. Based on 30-year average, P₂O₅ (40 lb/A) cost of $0.24/lb, and other costs $240/A (western Kansas, Schlegel, Havlin, and Dhuyvetter, 1996).

Figure 2. Phosphorus fertilizer increases value of N fertilizer by increasing N use efficiency of irrigated corn (western Kansas, Schlegel, Havlin, and Dhuyvetter, 1996).

Figure 3. Residual nitrate-N in the upper 10 ft of soil after 30 years of continuous irrigated corn production with and without annual P (40 lb P2O5/A) application (western Kansas, Schlegel, Havlin, and Dhuyvetter, 1996).