Fertilizer Economics 2009
Dwight Aakre Farm Management Specialist NDSU Extension Service January 2009
Points to Consider for 2009
Fertilizer Application
Fertilizer will likely be the most costly input for nonlegume crops Fertilizer is a yield enhancer – to a point Yield response to fertilizer is never certain Higher yields are usually associated with lower per unit cost Fertilizer prices are trending downward Alter your fertilizer bill by changing crop selection Set realistic yield goals Soil sampling
Historical HRSW and Nitrogen Prices
Year 2009 HRSW Price 6.30 N Price 0.50 Cost of 2.5 lbs N 1.25 Percent of HRSW Price 20%
2008
2007 2006 2005 2004 2003 2002 2001 2000
7.00
4.23 3.57 3.48 3.49 3.47 3.35 3.30 2.96
0.80
0.29 0.34 0.27 0.25 0.19 0.15 0.18 0.13
2.00
0.73 0.84 0.68 0.63 0.46 0.38 0.44 0.31
28%
17% 23% 19% 18% 13% 11% 13% 11%
Source: Dave Franzen, NDSU Extension Soil Specialist
Source: Dave Franzen, NDSU Extension Soil Specialist
The optimum economic N rate for $8 wheat is about 175 lb/a less credits. For $7 wheat, it is only about 150 lb N/a. $6 wheat, even lower.
Return to N, North Dakota, 80 cent N $6,$7 & $8/bu wheat
$300.00 $250.00 Return to N, $/A $200.00 $150.00 $100.00 $50.00 $0.00 0 50 100 150 Available N, lb/a Source: Dave Franzen, NDSU Extension Soil Specialist 200 250 300
7wht80N 8wht80N 6wht80N
Banding P increases its efficiency.
For any crop, if P is banded when soil test P is medium or higher, rates can be cut by 1/3. If P is low or lower, rates can be cut by ½. P farther from the seed than about 2 ½ inches is NOT a starter application.
Crops that need a starter will need something near the seed.
Source: Dave Franzen, NDSU Extension Soil Specialist
Crops that do best with a starter-
Corn (we’re north of Dekalb) Wheat Barley (really important!!!) Canola (really important!!!) Potato Sugarbeet (unless you have $ to burn)
Source: Dave Franzen, NDSU Extension Soil Specialist
Crops that don’t respond to starter
Soybean Peas Most legumes Sunflower
Source: Dave Franzen, NDSU Extension Soil Specialist
Crops that don’t respond to P at all-
Flax
Source: Dave Franzen, NDSU Extension Soil Specialist
PotassiumOur sandy soils in the east will probably still need K. Reduce table values by 1/3 if banding. Don’t try to build K in a sandit won’t work. If you are using 0-0-60 for small grains, it will cost about $7.50 to achieve an average 2 bu/a gain. Do the math.
Source: Dave Franzen, NDSU Extension Soil Specialist
Ramsey County Average Yields
Year 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 AVG STD CV 5-Yr AVG HRSW 38.9 37.1 31.7 42.5 36.7 28.8 26.4 33.3 29.0 27.9 22.2 29.2 22.4 28.7 24.5 45.8 33.5 35.5 25.0 17.0 33.5 31.5 42.0 33.5 28.0 32.0 31.4 6.7 0.21 37.4 Durum 31.7 36.6 31.5 51.4 34.0 27.4 12.1 13.5 17.1 34.4 22.8 25.1 21.5 26.7 21.5 40.8 32.0 34.0 25.6 15.0 28.2 29.5 40.0 34.5 27.0 33.0 28.7 9.0 0.31 37.0 Barley 55.8 61.3 52.8 70.1 62.3 48.0 49.7 54.9 51.0 53.6 43.5 55.3 48.2 46.1 42.0 70.5 51.7 49.5 41.0 20.0 48.5 46.0 55.0 54.5 41.0 46.0 50.7 9.9 0.20 60.5 Corn Grn 108.6 83.4 105.1 34.3 99.4 97.1 103.4 85.6 90.8 76.2 72.1 81.9 61.0 77.8 35.3 68.5 45.0 24.0 33.5 81.1 70.6 30.0 41.0 44.0 50.0 68.0 26.4 0.39 86.1 1394 217 0.16 1471 Canola 1286 1465 1352 1930 1321 1152 1351 1365 1322 Drybns 1593 1043 1290 708 1580 1479 1573 1457 1567 1426 1284 1535 1500 931 506 1101 1284 690 570 560 1400 1000 730 1050 850 1020 1143 362 0.32 1243 Soybns 34.1 23.6 28.7 11.5 25.5 26.9 28.5 24.3 22.8 22.6 25.8
16.5 12.3 21.5 18.0 9.0 9.0 25.5 18.5 8.0 15.0 17.5 11.5 19.9 7.3 0.37 24.7
Ramsey Spring Wheat Yields
1.2
1
0.8 Probability
0.6
0.4
0.2
0 0.0 5.0 10.0 15.0 20.0 25.0 Yield 30.0 35.0 40.0 45.0 50.0
Ramsey Durum Yields
1.2
1
0.8
Probability
0.6
0.4
0.2
0 0.0 10.0 20.0 30.0 Yield 40.0 50.0 60.0
Ramsey Barley Yields
1.2
1
0.8 Probability
0.6
0.4
0.2
0 0.0 10.0 20.0 30.0 40.0 Yield 50.0 60.0 70.0 80.0
Probability of Crop Yields for Ramsey County
Percent Probability HRSW Durum Barley Corn Canola Drybns Soybns
-----------------------------yield above------------------------------
10%
20% 30% 40% 50% 60% 70% 80% 90%
48.5
43.0 40.9 39.1 37.4 35.7 33.8 31.7 26.3
51.9
44.6 41.8 39.3 37.0 34.8 32.3 29.5 22.2
76.9
68.8 65.7 62.9 60.5 58.0 55.2 52.1 44.1
129.7
108.3 100.1 92.7 86.1 79.5 72.2 64.0 42.6
1829
1653 1586 1525 1471 1416 1356 1288 1112
1841
1547 1435 1333 1243 1152 1051 938 645
36.7
30.8 28.6 26.5 24.7 22.9 20.8 18.5 12.6
Expected Marginal Return for Wheat from 2.5 Additional Pounds of Nitrogen for Ramsey County
Percent HRSW Probability Fertility Wheat @ Wheat @ Wheat @ Wheat @ Wheat @ Yld Goal $5.00 $5.50 $6.00 $6.50 $7.00 Yield % of Ave
10% 20% 30% 40% 50% 60% 70% 80% 90%
48.5 43.0 40.9 39.1 37.4 35.7 33.8 31.7 26.3
130% 115% 110% 104% 100% 96% 90% 85% 70%
$0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50
$0.55 $1.10 $1.65 $2.20 $2.75 $3.30 $3.85 $4.40 $4.95
$0.60 $1.20 $1.80 $2.40 $3.00 $3.60 $4.20 $4.80 $5.40
$0.65 $1.30 $1.95 $2.60 $3.25 $3.90 $4.55 $5.20 $5.85
$0.70 $1.40 $2.10 $2.80 $3.50 $4.20 $4.90 $5.60 $6.30
Nitrogen recommendation for wheat = 2.5 YG-STN-PCC
$/lb of N $0.35 $0.40 $0.45 $0.50 $0.55
$N/bu $0.88 $1.00 $1.13 $1.25 $1.38
$/T-NH3 $574 $656 $738 $820 $902
$/T-Urea $322 $368 $414 $460 $506
Towner County Average Yields
Year 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 AVG STD CV 5-Yr AVG HRSW 38.1 36.3 31.6 42.4 42.8 28.9 24.3 35.1 34.2 25.0 22.9 27.0 24.6 30.4 24.5 43.8 34.5 32.5 26.0 17.0 36.0 31.0 45.0 33.0 27.0 34.0 31.8 7.1 0.22 38.2 Durum 42.3 41.9 32.9 38.4 36.7 29.1 22.3 29.5 20.8 31.0 22.1 20.5 21.8 27.7 22.4 41.0 32.0 29.0 26.9 15.8 30.0 26.8 40.5 30.5 25.5 35.0 29.7 7.3 0.25 38.4 Barley 57.0 58.7 50.9 59.9 65.3 48.0 48.2 52.1 43.7 47.5 43.3 49.0 41.0 55.4 36.2 67.3 52.0 43.5 38.0 18.5 48.5 46.0 55.0 45.5 40.0 48.0 48.4 9.9 0.20 58.4 Drybeans 1609 1440 1318 692 1594 1350 1237 1008 1366 1485 1154 1091 1500 1548 526 855 1265 560 730 320 1350 1360 930 750 840 900 1107 366 0.33 1331 Oil Snfl 1489 1698 1215 690 1839 1275 1392 1013 1140 1693 1298 1276 1363 1306 305 733 1392 940 950 1030 1500 1180 860 970 1130 1070 1183 339 0.29 1386 Flax 21.9 21.5 19.5 23.5 22.1 19.0 20.8 21.4 25.1 23.3 17.5 16.1 13.8 14.7 13.2 21.1 22.7 10.5 8.0 8.0 18.0 19.0 17.0 14.7 13.4 18.0 17.8 4.7 0.26 21.7
Towner Spring Wheat Yields
1.2
1
0.8 Probability
0.6
0.4
0.2
0 0.0 5.0 10.0 15.0 20.0 25.0 Yield 30.0 35.0 40.0 45.0 50.0
Towner Durum Yields
1.2
1
0.8 Probability
0.6
0.4
0.2
0 0.0 5.0 10.0 15.0 20.0 Yield 25.0 30.0 35.0 40.0 45.0
Towner Barley Yields
1.2
1
0.8 Probability
0.6
0.4
0.2
0 0.0 10.0 20.0 30.0 40.0 Yield 50.0 60.0 70.0 80.0
Probability of Crop Yields for Towner County
Percent Probability 10% 20% 30% 40% HRSW Durum Barley Drybns Oil Snfl Flax ---------------------------yield above---------------------49.9 44.1 42.0 40.0 50.6 44.5 42.3 40.3 74.7 66.6 63.6 60.8 1934 1634 1525 1422 1945 1667 1566 1471 29.5 25.6 24.2 22.9
50%
60% 70% 80% 90%
38.2
36.5 34.5 32.3 26.5
38.4
36.6 34.6 32.3 26.3
58.4
55.9 53.1 50.1 42.0
1331
1239 1137 1023 727
1386
1302 1207 1102 828
21.7
20.5 19.2 17.8 13.9
Expected Marginal Return for Wheat from 2.5 Additional Pounds of Nitrogen for Towner County
Percent HRSW Probability Fertility Wheat @ Wheat @ Wheat @ Wheat @ Wheat @ Yld Goal $5.00 $5.50 $6.00 $6.50 $7.00 Yield % of Ave
10% 20% 30% 40% 50% 60% 70% 80% 90%
49.9 44.1 42.0 40.0 38.2 36.5 34.5 32.3 26.5
131% 115% 110% 105% 100% 95% 90% 84% 69%
$0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50
$0.55 $1.10 $1.65 $2.20 $2.75 $3.30 $3.85 $4.40 $4.95
$0.60 $1.20 $1.80 $2.40 $3.00 $3.60 $4.20 $4.80 $5.40
$0.65 $1.30 $1.95 $2.60 $3.25 $3.90 $4.55 $5.20 $5.85
$0.70 $1.40 $2.10 $2.80 $3.50 $4.20 $4.90 $5.60 $6.30
Nitrogen recommendation for wheat = 2.5 YG-STN-PCC
$/lb of N $0.35 $0.40 $0.45 $0.50 $0.55
$N/bu $0.88 $1.00 $1.13 $1.25 $1.38
$/T-NH3 $574 $656 $738 $820 $902
$/T-Urea $322 $368 $414 $460 $506
Objective is to maximize return over variable costs-ROVC is available to pay:
Land costs
Machinery ownership Labor and management (family living)
Cash Price for Breakeven Return over Variable Costs - North East N.D. Enter the futures price for Enter your expected local basis Expected local cash price for Base crop = 1 Yield Price Income Variable costs: seed herbicide fungicide insecticide fertilizer crop insurance fuel & lube repairs drying misc. operating int. Total var.costs Return over variable costs 0 Corn 97 $3.54 $343.02 0 Soybean 27 $7.78 $210.15 1 Wheat 37 $6.00 $222.00 Wheat Wheat $6.30 $0.30 $6.00
Base Crop is
Wheat
Barley 56 $3.66 $204.82
Drybeans 14.1 $17.76 $250.40
Oil Snflr 14.8 $15.54 $230.05
Conf Sunf 12.9 $19.57 $252.46
Canola 14.7 $17.39 $255.56
Flax 21 $8.39 $176.09
$62.65 17.00
0.00 98.02 28.60 17.33 17.93 19.40 1.50 10.50 $272.93 $70.10
$46.56 17.00
8.00 16.45 14.30 12.07 14.29 6.00 5.39 $140.06 $70.10
$16.45 17.00 5.50 66.19 14.10 11.86 13.46
1.50 5.84 $151.90 $70.10
$15.20 14.00 1.50 62.29 7.20 13.38 14.47
1.50 5.18 $134.72 $70.10
$42.00 33.00
$23.54 22.00
6.00 49.87 14.70 13.21 14.27 2.96 7.25 6.15 $159.95 $70.10
$37.05 22.00
12.00 40.91 20.80 12.92 14.09 2.58 13.00 7.01 $182.36 $70.10
$39.50 18.00
0.00 81.15 15.60 10.23 12.35 1.50 7.13 $185.46 $70.10
$11.20 17.00
36.08 22.50 13.89 16.15
9.75 6.93 $180.30 $70.10
37.44 9.30 11.82 13.66
1.50 4.08 $106.00 $70.10
Note: - Only variable costs are considered in this comparison. You can include an amount under "misc." to account for any differences between crops in fixed costs, labor, management and risk.
Summary
We are in deflationary period for commodities Watch for pricing opportunities in the spring when bidding for acres takes place Delay purchasing of inputs Consider changing crop mix Don’t over react – fertility is still important
NDSU Farm Management Web Page
www.ag.ndsu.nodak.edu/aginfo/farmmgmt/farmmgmt.htm