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How fertiliser pricing affects economic optimum

07 October 2021

Due to the European gas price moving from $6 to $42 (as I write this) we have seen the cost of production of fertiliser increase drastically due to natural gas being part of the manufacturing process – production costs have risen by €200/t this week alone!

Therefore the price you bought at will impact upon the economic optimum nitrogen (N) rate you should apply. If you bought earlier on in the year at £280 for example, your economic optimum wouldn’t have changed and you’ll be ok to stick with, say, 220kgN on winter wheat. However, if you have bought the majority of your nitrogen in the past few weeks (now above £500/t at the time of writing this) you may need to adjust your rate.

When looking at N dose trial data you see a response curve - as the rate of nitrogen increases, so does the yield – until you get to a certain point where the curve plateaus and then starts to decrease again at high rates of nitrogen. From this curve, you can see the biological optimum N rate. You can also calculate the economic optimum N rate; which takes into account the crop price as well as the fertiliser price.

From these trials we also know that the first 100kgN gives us the best response and therefore best return on investment (ROI) – no matter how much the fertiliser costs. The next 60kgN also gives us a good response and ROI. It is the next 50-60kgN/ha that relies on crop/fertiliser pricing, crop potential, weather etc to see if it is an economically viable application.

So what does all that mean?? If you had to buy at a high price you may need to reduce your fertiliser rate. Taking wheat as an example, we know that a lower rate of 160kgN/ha gives a good ROI, independent of fertiliser price. When we come to spring we can then re-evaluate whether the final 50-60kgN is required; based on crop pricing, potential, mineralisation and use of tools like the N-Tester to judge whether it is economically the right thing to do.

Read more about the economics of nitrogen fertiliser

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