Impact of Nitrogen Prices on Fertilization Decisions

Impact of Nitrogen Prices on Fertilization Decisions -2003

Dr. W.M. Stewart, Great Plains Director
Potash & Phosphate Institute

Farmers making crop fertilization decisions this spring that did not prepurchase their N will be facing unusual circumstances. The price for anhydrous ammonia and other N products will likely be substantially higher than in the past. The reason, of course, is that natural gas prices have escalated wildly over the past few weeks. Natural gas is used as a feedstock in the production of N fertilizers.

With spring planting just around the corner, growers are asking how fertility can be best managed with high N prices and how to get the most out of every pound of N fertilizer applied. Following are some important decision making considerations for the upcoming season.

Don’t overreact to price changes.

Research throughout the U.S. has shown that neither fertilizer nor crop price has a dramatic effect on profit maximizing yield and optimum N rate. Table 1 shows the effect of N price on profit maximizing N rate (with P) in a long-term irrigated corn study in western Kansas. A $0.25 increase in N price results in a reduction in optimum N rate of only 15 lb/A. Reducing N rate below optimum levels lowers profit generating yield. Table 2 shows an Iowa example of how reductions in N from the optimum levels can lower yield.

Take into account all N sources.

Soil testing for nitrate-N is a best management practice (BMP). It’s an especially good idea when the value of N is high. Since nitrate-N is mobile in soils, sample depth should be at least 2 feet in more arid regions. A one-foot sample is sometimes used in humid regions as an estimate of mineralizable N. Local sampling recommendations should be followed. Nitrogen from other sources such as legumes and manure should be accounted for as well.

Make sure to employ a complete and balanced fertility program.

When the squeeze is on, many producers look for places to cut costs (inputs) such as P and K. Caution is advised because cutting needed P, K, and other nutrients can result in lost profit and reduced N use efficiency, regardless of N price. The long-term corn study in Kansas has demonstrated how important P fertility is in increasing N use efficiency and profit. Over a 30-year period across several N rates, the application of 40 lb P₂O₅/A per year increased average N use efficiency of corn as much as 44 percent (Figure 1). But, you might ask, what about profitability of P application when N price is high? This same study showed that 40 lb P₂O₅/A per year increased the 30-year average net revenue across N rates by about $100/A when N was priced at $0.25/lb (Figure 2).

Adequate K nutrition is also important in getting the most out of every pound of N fertilizer applied. A summary of four years of work at Ohio State University shows that increasing soil test K level into the optimum range helps increase the amount of N taken up by corn, leading to higher yields and leaving less of the N in the soil at the end of the season (Figure 3). This means more return on investment in N and less N available to cause problems in water supplies. Higher K resulted in more efficient N use at all N rates tested. Nutrient balance is clearly an important part of maximizing N use efficiency and profit, regardless of N price. Reducing P and K inputs should not be considered unless soil test levels are in the medium range or above. Reducing rates in the medium range may result in yield loss unless placement is optimized and should be viewed as a short term strategy since most growers will want to maintain soil test levels in the high range for maximum long-term profitability.

Use proven and effective production practices.

Consider optimum timing and placement methods for N, P, K, and other nutrients. Where appropriate, split N applications can dramatically increase N use efficiency. Also, use proven pest management practices and the best hybrids and varieties for the region. In other words, make sure that the stage is set to maximize efficiency of all inputs.

Fundamental agronomic principles are important in making sound management decisions, regardless of input prices. Fertilizer and crop prices have relatively little effect on optimum yield and fertilizer rate. Maintaining a complete and balanced fertility program that includes adequate N, P, K, and other nutrients helps ensure that
· applied N will be used efficiently;
· high yield potential will be maintained;
· cost per unit of production will be lowered;
· and profit will be maximized.