The European gas market has been especially volatile recently. Prices increased from $6 to over $50 per MMBtu (Metric Million British Thermal Unit) in the past few weeks.
This, naturally, has affected the production cost of fertiliser, as natural gas is part of the manufacturing process.
In one week alone, production costs rose by a staggering €200/t.
What does this mean for growers? Natalie Wood, Agronomy Operations Manager at Yara, looks at the important factors.
“The price you bought at will impact upon the optimum nitrogen (N) rate you should apply in terms of economics,” says Natalie.
“If you bought earlier on in the year – at £280 for example – your economic optimum wouldn’t have changed. You’ll be ok to stick with, say, 220kg of N on winter wheat.
“However, if you have bought the majority of your nitrogen in the past few weeks (now around £700/t at the time of writing) you may need to adjust your rate.”
Natalie, pictured right, points to some of Yara’s own N dose trial data to illustrate her point.
A response curve occurs as the rate of nitrogen increases and the yield follows accordingly.
However, at a certain point the curve plateaus. At particularly high rates, the curve begins to decrease.
This perfectly demonstrates that there is a biologically optimum N rate and, from there, we can calculate the optimum N rate in terms of cost, taking both crop and fertiliser prices into account.
“Trials show that the first 100kg of N gives us the best response,” says Natalie.
“This is therefore an excellent return on investment (ROI) – no matter how much the fertiliser costs.
“The next 60kg of N also gives us a good response and meets ROI. When we get to the final 50-60kgN/ha we must be more careful.
“ROI can vary depending on pricing, crop potential, weather conditions and more. All of this needs to be considered to make an application economically viable.”
In essence, this means growers who have had to buy at a high price may then need to reduce their fertiliser rates to establish a good ROI. For example, a rate of 160kgN/ha for wheat will deliver just that.
“We can re-evaluate whether the last 50-60kg of N is required when spring arrives,” says Natalie.
“Considerations like pricing, crop potential, min-eralisation and our use of effective tools will help make the call whether that’s the right thing to do in economic terms.”
In a season where financial circumstances will play an even heavier role in farmer decisions, it is more important to ensure all aspects of crop nutrition – not just nitrogen – are robust and conducive to a good yield potential.
“We often talk about Nitrogen Use Efficiency (NUE), but Nutrient Use Efficiency should be the focus,” says Natalie. “All nutrients work together within a plant for optimum growth.”
Sulphur, for example, increases the uptake efficiency of nitrogen – meaning you will not only benefit from the sulphur, but through the resulting utilisation of available nitrogen in the soil as well.
“We see it in Yara products and trials,” says Natalie. “Independent trial work over the years has shown an average yield increase of 0.85t/ha in wheat and 0.5t/ha in oilseed from sulphur applications.
“If you are going at the 160kgN/ha rate for winter wheat, using an NS product to provide all the nitrogen is perfect for ensuring that sulphur is applied little and often too, thereby increasing the uptake efficiency.
“Applying sulphur little and often benefits yield due to reducing losses through potential leaching – so an NS product is certainly the better choice this season over straight nitrogen.”
In a normal year, only 25 per cent of nitrogen actually needs to be applied as straight for that final application.
If that’s not economically viable this year, you might be wasting money that you won’t see a return on.
“As always, we need to look at the whole picture,” adds Natalie. “Work out what’s best for your farm and will achieve ROI.
“Remove inputs that ultimately cost more than they’ll deliver in value.
“Put an effective nutrient management plan in place now and consider your position when next season arrives.”