Planning to applying: How to manage high nitrogen prices

There is concern about nitrogen fertilizer prices and crop management as we go into the 2004 crop year. Volatility and changes in the natural gas market affects nitrogen fertilizer prices because natural gas expense accounts for 75 to 90 percent of the cost per manufactured ton of the fertilizer.

Nitrogen fertilizer supplies and prices first became an issue with a large increase in natural gas prices in the winter of 2000-01.

Natural gas prices eased after that spike, but recently climbed to new, higher levels due to a variety of factors.

Several issues ultimately will influence final planting decisions: soybean prices, cotton prices, technology fees, fuel costs, labor cost and availability, seed availability, weather, and enterprise cash flow differences.

This situation requires careful management by growers, as nitrogen fertility has tremendous effects on yields and production efficiency.

Nutrient management planning is a budgeting system to evaluate nutrient sources, levels, and needs, and to develop an economically and environmentally sound system of providing plant nutrients.

The first step is a strong soil testing program to identify fertilizer needs for the crop to be grown. Nitrogen in soils is not routinely tested in the Mid-South, however nitrogen fertilizer recommendations will be provided to achieve optimum growth and production based on the crop to be grown.

In contrast to nitrogen, plant-available phosphorus and potassium are actually measured in the soil testing process, and fertilizer recommendations are based on that information. The most important information from soil testing may be the lime requirement. Maintaining adequate soil pH levels is the master variable, as more efficient crop use of all nutrients will follow.

Commercial nitrogen fertilizer purchases should be evaluated on cost per nutrient pound, not on cost per ton of material. Divide the pounds of nitrogen per ton of fertilizer material into the cost per ton. Urea ammonium nitrate solution (UAN) is 32 percent nitrogen, so it has 640 pounds of nitrogen per ton (2000 × 0.32 = 640). If the price per ton is $160, then the cost of nitrogen is 160/640 = $0.25 per pound. At $155 per ton, the price of nitrogen in UAN is about $0.24 per pound.

Soybeans obtain nitrogen from the atmosphere through a symbiotic relationship with bacteria and, if inoculated, do not require supplemental nitrogen fertilizer. Many states recommend nitrogen credit of 20 to 30 pounds per acre for crops following soybeans. In Mississippi, it has been difficult to differentiate whether subsequent crop response to soybeans was attributable to residual nitrogen, or to a crop rotation effect, so we do not recommend a credit at this time.

With the soil test results, fertility recommendations, and prices, prepare a budget for the nutrients just as you would do a cash flow projection.

The fundamental decisions are if the nutrient is needed, when to apply it, the source of the nutrient, and how to apply it.

Once these basic decisions are addressed, growers and applicators should be careful with fertilizer applications. Tune up and calibrate the application equipment.

Avoid applications to non-producing areas, especially surface waters.

Time applications for the most benefit for the growing crop and to lessen loss to the surrounding environment.

Avoid knifing in fertilizers when the soil will not seal.

Larry Oldham is a member of the Mississippi State University Extension Service.

NOTE: As stated above, a number of factors may lead to more soybeans being planted in 2004, including shifts to fields without a soybean cropping history. Be sure to inoculate the seed with the proper bacterium if soybeans are planted on a particular field for the first time in three to five seasons or that has never had soybeans planted on it.

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