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Implications of cutting back on fertilizer

As one of the larger input costs on the farm, fertilizer is often viewed as
an area to cut costs when economic or environmental conditions are not promising.
When yields are expected to be low because of drought, when grain prices are
low, when fertilizer prices are high, when input dollars are tight, or when
economic risk is high, fertilizer cutbacks are tempting. But what are the consequences
of cutting fertilizer, especially nitrogen (N)?

"Yields are mostly limited by the supply of moisture under our conditions.
So fertilizer strategy becomes one of matching the supply of nutrients from
soil and fertilizer sources, with the yield potential of the crop and then scaling
the rate back to an economically optimum level," explains research scientist,
Stewart Brandt at Agriculture and Agri-Food Canada at Scott, Saskatchewan.

To understand the potential risks and benefits of fertilizer cutbacks, Brandt
says understanding crop response to N and how economics are affected should
be considered. He cites several studies done on wheat and canola to illustrate
typical yield responses under varying moisture, crop and fertilizer prices.
He says the N rate for maximum yield is always higher than the N rate needed
to optimize economic return, because increased yield must always offset increased
fertilizer cost. However, he says that grain prices tend to have a much smaller
impact on the optimal level of N than does moisture stress.

"Moisture conditions have a much greater impact on optimum N rates than
commodity prices," explains Brandt.

Recent AAFC research in Saskatchewan at Melfort, Indian Head and Scott show
a similar response. A 40 percent decrease in canola price only reduced the optimum
N rate by about 15 percent, but a 40 percent reduction in available moisture
reduced the optimum fertilizer N rate by about 40 percent. And an increase in
fertilizer N prices from $0.23 per pound to $0.34 per pound only resulted in
about a 10 to 15 percent reduction in the optimum N rate for canola, also indicating
that prices have a smaller effect than available moisture. However, Brandt points
out that the combination of low canola prices and high N costs could reduce
the optimal N rate by 25 to 30 percent.

Since fertilizer N rates are influenced more by soil moisture than fertilizer
or grain prices, growers then are stuck with trying to set realistic yield targets
as a critical part of fertilizer strategies. Brandt says some useful equations
to estimate yield based on the supply of water and how efficiently it is used
have been developed for various soil zones in Saskatchewan. Saskatchewan Agriculture
and Food has posted yield equations for wheat, barley and canola on its web
site.

Balance all inputs
Brandt stresses that other input levels must be balanced with fertility programs,
as well. "There is little point in making dramatic cuts to fertilizer inputs
when other inputs are at levels that support much higher yield," he cautions.

Ultimately, the most limiting factor will determine the final level of yield.
Research from another study supports BrandtÕs caution. At low fertilizer application
rates, yield increased with increasing seeding rates from 2.5lb/ac to 5.0lb/ac,
but no further increases in yield over 7.5lb/ac. However, there was a response
to high seeding rate at moderate and high fertility.

Similarly, at the low seed rate, yield increased with increased fertility from
the low to mid, but not the high rate. With mid and high seed rates, there was
a yield response to high fertility. Brandt explains that the highest yield was
obtained with the combination of high seed and high fertilizer rates, and that
the optimum levels of one input were determined by the optimum levels of another
input.

Heading into 2007, many growers have good to above average soil moisture because
of good rainfall after harvest, and significant early season snowfall. Where
stubble moisture prospects are good and with strengthening grain prices, a fertilizer
strategy should look at maximizing economic yield, and fertilizer strategies
will likely call for high N fertilizer rates, especially where average to above
average crops were taken off in 2006. Soil test recommendations will be a good
guide for 2007. In the few areas where stubble moisture is lower than normal,
available soil moisture at seeding can provide a useful indicator of target
yields.

Brandt says growers should be cautious of large cutbacks in response to poor
soil moisture, low grain prices or high fertilizer prices. When fertilizer cutbacks
are made, growers should re-evaluate other inputs to determine if they should
also be cut. Cutbacks in fertilizer rates could be useful as a short-term survival
mechanism, but on a long-term basis, there is a risk that soil nutrient levels
could be seriously depleted. -30-