Conference highlights nutrient stewardship
Written by Jonathan Eisenthal
To help corn growers become better stewards of our state’s natural resources, Minnesota Corn sponsors multiple farmer-education programs, including the annual Nutrient Management Conference. The conference is organized by University of Minnesota Extension, with the support of the Minnesota Agricultural Water Resource Center and a host of farm organizations. This year’s Nutrient Management Conference was held Feb. 8 in Mankato.
Below is a rundown of a presentation given by University of Illinois ag economist Gary Schnitkey during the conference. The talk was titled, “Managing Fertilizers for Optimal Profits and Risks.” It focused on what farmers can expect in the next 12 months and strategies for reducing the negative impact to the balance sheet.
To learn more about Minnesota Corn-supported farmer-education programs, visit mncorn.org.
Strategies to deal with high fertilizer prices
Fertilizer prices went sky-high in November, when farmers were paying $700 per ton for anhydrous ammonia. Then prices doubled again, with the market demanding nearly $1,500 per ton in early January.
Schnitkey said this may be the year more farmers choose to reduce their fertilizer rates and follow the Maximum Return to Nitrogen (MRTN) calculation. This could help them counter the impact of fertilizer costs, which are often the biggest line item for row crop farmers, he said. He believes it’s possible fertilizer prices will drop again, but not before this coming growing season.
Many farmers choose to apply somewhere in the range of 1.2 pounds of nitrogen per bushel of field corn they would like to produce, Schnitkey said. MRTN is generally less than a pound per bushel. He used a farmer-funded study conducted in central Illinois, called the Precision Conservation Management (PCM) study, to show that there is a sweet spot, where using just enough fertilizer produces the most bushels per cost of fertilizer. In other words, that’s where maximum profit is found. In northern Illinois, which Schnitkey said is quite similar in soil conditions to Minnesota, MRTN is calculated to be 178 pounds of anhydrous ammonia per acre when the corn price is $5 a bushel and fertilizer costs $700 per ton. Though corn prices may rise to get farmers to produce enough supply to meet world demand, the current higher price of fertilizer will probably cause the MRTN rate to drop somewhat.
In addition to saving money, application of fertilizers according to the MRTN rate is associated with a beneficial reduction in the environmental impact caused by nutrients leaving the farm field and entering area waterways.
Every farmer knows that too little fertilizer can cause a field to under produce and reduce profits. The PCM study proved that. But it also showed that too much fertilizer, though it can produce more bushels, can actually drag per-acre profit down.
An analysis of the PCM study showed that, among its participating farmers, those who used 20 pounds more than MRTN lost a bushel per acre and realized $20 less profit per acre than farmers who used the MRTN fertilizer rate. Increasing the rate to 20-40 pounds above MRTN actually yielded six bushels per acre more than the MRTN rate, but per-acre profits dropped $31. Using fertilizer at 60 pounds or more per acre above the MRTN rate garnered 18 bushels more than operators who used MRTN, but per-acre profit dropped by $31 per acre.
A change in timing may provide another avenue to cost relief. All things being equal, the PCM study showed the highest profits to operators and landowners came from applying most of their fertilizer in the spring in a pre-plant application, or most of it in a sidedress into the growing crop. Reducing the number of passes in the field is the most direct way to reduce the cost of fertilizing the field.
But this year’s volatile fertilizer market changes the equation.
“Let’s say you have some nitrogen to apply yet,” Schnitkey said. “One strategy I suggest you consider is making split applications. Before planting you apply 75 percent of the MRTN (or 75 percent of what you typically apply before planting), and then come along (in the May-June timeframe) and apply the remainder after planting. This is just the classic risk management thing.”
Switching to a different form of nitrogen could make sense. Anhydrous ammonia is generally less expensive than 28 percent and other popular fertilizer formulas. However, you have to make sure the supply is available, because if everyone decides to switch, it could make the anhydrous supply scarcer and drive up the price as well.
Schnitkey doesn’t advise switching the crop rotation and planting more soybean acres just to reduce the need for fertilizer. Higher profits from corn compared to soybeans will zero out any gains from using less fertilizer.
“Plus, then you have all the problems that come with changing your rotation,” Schnitkey concluded.
