The Economic Rationale for Variable Rate Nitrogen

March 18, 2016

We know that nitrogen (N) fertilizer is one of your largest input costs, and it can often exceed $100 per acre. When you’re spending that kind of money, you want to see a worthwhile return on your investment (or, at the very least, break even on your investment). 

It’s always been difficult to predict how much N a field needs to produce maximum yield, especially because the amount of N you need is affected significantly by field variability.

On average, over 1 lb of N is needed per acre to produce each bushel of corn. The more that yield varies in a field, the more that your nitrogen needs will vary.

So to get the best return on N, adjusting N application rates based on known field variability would make strong business sense.

Although phosphorus (P) and potassium (K) are often applied with different rates in a field based on the field's variability, N fertilizer has been less commonly applied at variable rates even though the potential value is greater.

This is largely because in the past, the method of determining how to vary the application rate for N was more difficult than P or K.

The Differences Between Nitrogen, Phosphorous, and Potassium

Nitrogen fertilizer is different than P and K for multiple reasons.

First, as previously mentioned, more N is required to meet yield goals than P or K, and the input costs are much greater.

Second, there is no grid soil testing for N to help guide variable rate N application.

Third, unlike P and K, nitrogen that is not used by the crop is lost at the end of the season.

And finally, unlike P and K, nitrogen shortage is common and can significantly reduce crop yield. This is especially common in wet years as N is easily lost with higher rainfall.

The Variable N Application Solution

Today, with FarmLogs, the ability to generate a variable-rate recommendation for N fertilizer exists, and you can do it with a push of a button.

We use multiple years of historical satellite imagery to measure the productivity of your fields in previous seasons so that we can determine the nitrogen your fields will need to thrive this season. This information, combined with daily weather data and soil survey information, goes into a crop model to generate customized, accurate N fertilizer prescriptions for each unique field on your farm.

By optimizing fertilizer rates for field variability with FarmLogs N Prescriptions, you’re increasing the likelihood of maximizing yield potential without over-fertilizing lower yield areas.

This means you can also potentially reduce seasonal input costs.

The Payoff for Variable Rate Prescriptions

The payoff for variable rate application depends both on how well you target your N rate and how much nitrogen your fields need.

In the following scenario, we’ll show you how switching from a flat rate recommendation to a variable rate recommendation in an 80-acre field could increase your yield, reduce input costs, and increase your margins by $816 per 80 acres.

The Scenario

In this scenario, you’re applying a 180lb flat rate of N/acre to a 40-acre field. This rate is based on the amount of N you need per acre to hit your average yield for that field.

But, because that 40-acre field is variable, a majority of it will NOT produce the average yield. Which means that with your 180lb flat rate application, some areas of your field will be over fertilized and some will be under fertilized.

Lost Yield From Under Fertilization

In this 40-acre field scenario, a flat rate application results in 20% of your field being under fertilized by 40lbs N/acre. (Note that this level of field variability is quite common.)

That 40lb-N shortage causes a 35/bu an acre loss. At $3.60/bu, you stand to lose $1,008 in yield profit for that field ($126/acre).

Here’s the math:
20% of 40 is 8 acres
You've lost 35/bu an acre in yield.
8 acres x 35/bu an acre is a 280-bushel loss.
280 bushels at $3.60/bu is a $1008 yield profit loss ($126/acre).

 

Wasted Input From Over Fertilization

In the same 40-acre field, your flat rate application results in 60% of your field being over fertilized by 40lbs N/acre. (Note that this type of field variability is also quite common.)

If N costs you $0.30/lb, you stand to waste $288 in fertilizer costs that result in $0 yield increase.

Here’s the math:
60% of 40 acres is 24 acres.
N is $.30/lb.
24 acres x ($.30 x 40lbs of over-applied N/acre) is $288 saved.

Your Total Profit Gained

By lowering your rate on over-fertilized acres and raising your rate on under-fertilized acres, you will make $1008 in additional yield while also saving $192 on N for a total profit of $1200 ($30/acre).

At 1,600 acres, that equals a total profit of $48,000 from variable rate nitrogen.

Want to know more about N prescriptions from FarmLogs? Click on the "contact us" button below! 

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Dr. Tracy Blackmer

Author

Dr. Tracy Blackmer Dr. Tracy Blackmer is an expert agronomist with over 20 years of experience incorporating precision agriculture technologies in agronomic management for growers. His work has included organizing a network of over 1,000 growers from 12 different states to conduct Nitrogen adaptive management using imagery, yield response, and other feedback assessments. Tracy also focuses on implementing large-scale, on-farm trials that are easy for growers to implement and result in improved agronomic recommendations. His work as the Vice President of Science at FarmLogs includes developing tools that improve local management for growers through better and simplified recommendations and monitoring.