Play 'What If' Scenarios with Corn Price and Nitrogen Rate

Play 'What If' Scenarios with Corn Price and Nitrogen Rate

Some may dial rates higher even if N is more expensive.

The temptation to dial back the nitrogen rate for corn either pre-plant or sidedress may not be as strong as you think this spring. Yes, nitrogen prices have escalated, and are considerably higher than a year ago. But corn prices are much higher as well. What seems to be the common theme in farm country is that if you're growing corn, try to produce as many bushels as possible.

That still needs to be done with an eye toward economics, cautions Bob Nielsen and Jim Camberato, Purdue University Extension agronomists. The pair, along with other co-workers, has prepared a chart that allows you to select the nitrogen price you're paying per pound, no matter what form of N you're applying or when you're applying it, then pick a corn price that you either have locked in or believe you can attain, and determine by reading the chart what the optimum economic rate for total pounds of commercial N (or organic N through manure) you should apply.

The concept is based on the ag economic law of diminishing returns. What Nielsen and Camberato seek is the point at which the last unit of N produces enough corn to cover its cost, but one more unit of N would produce less corn in value compared to the price of N. In other words, even if you were producing more corn, you would still be losing money based on what you paid for the nitrogen input.

You can find the chart in their article on recommendations at:  www.agry.purdue.edu/ext/corn/news/timeless/NitrogenMgmt.pdf.

Here are a few examples based on their chart. The recommendations and data behind the numbers in the chart come from three years of nitrogen trials on university and private farms coordinated by Nielsen and Camberato throughout Indiana.

Suppose anhydrous ammonia is $900 per ton. That's equivalent to 55 cents per pound of N. Corn is $6 per bushel. How much N could you afford to apply? Remember this counts N form all commercial sources, including starter, any N broadcast with phosphorus and any sidedressed N. If you're in northwest or west central Indiana, that's about 163 pounds per acre.

Now assume nitrogen is only 40 cents per pound—you got a bargain. You could bump up to 167 pounds per acre at $6 corn. As the price of the input decreases, the more of it you can apply per acre and still expect an economic return for corn.

Now suppose you farm in east central Indiana. N price is 55 cents per pound and corn is $6. You would apply about 202 pounds per acre. This reflects the different soil types in that part of the state. The chart you use, of the three the pair has prepared, depends upon where you live, and is based on data coming form plots in those areas.

If you still pay 55 cents per pound but corn is $7, now in east-central Indiana you would apply 205 pounds per acre. Generally, the higher the price of corn, the more pounds of N you can apply and still expect an economic return.

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