Fertilizer
Costs
Farmers are very concerned about high fertilizer prices and declining commodity prices projected for 2009. Fertilizer prices have dropped recently and hopefully this trend will continue. Every farmer needs to take a hard look at fertilizer management in 2009. This includes being able to determine the amount of fertilizer to apply, the most economical cost of plant nutrients and the cost per acre.
Let’s start with some basic terms we use when formulating fertilizer. Any fertilizer material will always be listed as N (nitrogen), P205 (phosphate equivalent) and K20 (potash equivalent). Unit - A unit of plant food is equal to the percent. In 2000 lbs, a 5% nitrogen formula contains 100 lbs of plant food. Analysis- This is the percent of N- P205-K20 given to fertilizer and is used more for a per acre blend. Grade- This is also the percent of N-P205-K20 given to fertilizer but is figured on a full ton basis. Fertilizer is normally formulated on a per ton basis or a per acre basis. The 80-20-10 analysis is an example of formulating fertilizer to the farmer’s needs per acre.
What is the most economical source of nitrogen? Let’s assume NH3 is $850 per ton and urea is $477 per ton. NH3 is 82% N and has 1640 units of N in a ton. If we divide the NH3 price of $850 per ton by 1640 units we have a cost of $0.52 per lb of actual nitrogen. Urea is 46% N and has 920 units of N in a ton. If we divide the urea price of $477 by 920 units we also have a cost of $0.52 per lb of actual nitrogen. Using these numbers, NH3 and urea have the same exact price per lb of actual N.
What is our cost per pound of actual plant nutrient? Most fertilizer dealers carry either DAP (18-46-0) or MAP (11-52-0). If we use DAP as an example, it has 18% N and 46% P205. If we add the 18% and 46% we get 64% nutrients in DAP or 1280 units of actual plant food in a ton. If DAP is $950/ton and we divide $950 by 1280 units of plant food we have a cost of $0.74 per lb of actual nutrient. We could also make the assumption that the 360 pounds of nitrogen (18%) in a ton of DAP is say $0.50 per pound or $180 per ton. Then the remaining P205 cost would be $770 per ton. If we divide $770 per ton by 920 units of P205 we have a cost of $0.84 per lb of actual P205.
What is our cost per pound of K20 if potash (0-0-60) is selling for $700 per ton? If we divide the price of $700 by the 1200 lbs of actual K20 in a ton we get a price per lb of $0.58. If your soil test recommendation calls for 20 pounds of K20 and the cost is $0.58 per lb of actual K20, then the cost will be $11.60 per acre.
How much fertilizer do I apply? If I want to apply 80 lbs of N to an acre of corn using urea how much do I need? I want 80 lbs of N and if I have 46% then I divide 80 lbs by .46 to get 174 lbs of urea needed. If I want to apply 40 lbs of P205 to an acre using MAP (11-52-0) how much do I need? Again we want 40 lbs and MAP has 52% so I divide 40 lbs by .52 to get the 77 lbs of material that is needed. The 77 lbs of MAP will also supply about 9 lbs of N to the acre.
Now let’s look at our costs per acre. Let’s assume we are fertilizing corn and the 90-20-0 per acre analysis costs $65 per acre and the starter fertilizer applied with the planter was $16/acre. Your total fertilizer cost would be $81/acre. Another way to look at this is what is your fertilizer cost per bushel produced? If the fertilizer cost $81/acre and the final corn yield was 115 bushel/acre, then the fertilizer cost in producing a bushel of corn will be $0.70/bu. When you know your projected costs, what management changes can you make? You will need to work with you crop advisor and fertilizer dealers to determine the best options at the most economical cost while having a good probability of yield response. Historical fertilizer cost data and returns for most crops can be obtained from the North Dakota Farm Business Management Report.
You can obtain additional information concerning the North Dakota Farm Business Management Program and its various reports and materials by going to the website at www.ndfarmmanagment.com. You can also contact Steve Zimmerman, State Supervisor for Ag Education at the North Dakota State Capitol at 701-328-3162. The Farm Business Management Program is sponsored by the State Department of Career and Technical Education.
