Maximizing Returns on Fertilizer Investment
Assistant Professor Soil Fertility & Plant Nutrition
Department of Crop Sciences
A substantial increase in cost of fertilizer and other agricultural commodities calls for conscientious planning and sound strategies to continue to produce high yields while maintaining profitability. In an ideal world where financial resources are not limited, input needs are determined solely by estimating the expected potential return. In the real world, and especially at times of high input costs, allocation of resources must be done by priority. Soil fertility decisions such as fertilizer and lime applications are weighed against other crop production needs and farmer’s goals. Since final crop yield is affected by a host of management decisions and weather conditions that are often interrelated, under limited financial resources, ranking cropping system needs can be very tough.
When considering the nutritional needs of a crop, the goal should be to obtain the greatest return on investment by focusing on inputs that will result in the greatest profit. This concept is known as Liebig law of the minimum. This law likens plant growth or yield to a barrel with staves of unequal lengths in which the shortest stave determines the capacity of the barrel. In terms of soil fertility the staves could represent soil pH, nitrogen (N), phosphorus (P), potassium (K), sulfur (S), iron (Fe), and other secondary macronutrients and micronutrients needed by the crop. Thus, the first step in assigning priorities should be to determine what is limiting the crop. The following example of corn yields under different hypothetical fertility scenarios (See figure) illustrates the importance of optimization of the limiting nutrient to increase both yield and return on other investments. Under adequate P and K supply, N is the nutrient in shortest supply; thus, applying N will continue to increase yield until an optimum N rate beyond which additional N will not result in enhanced yield. In this first scenario, adding N to an optimum will not only result in increased yield, it will also optimize the return on the P and K investment. When the soil is low in K, adding N will only optimize yield to where K becomes limiting; beyond that point, adding additional N would actually result in lower yields and even a greater loss of return on the N applied. When P is limiting, adding N will result in a similar yield response curve to that where P and K were adequate, but additional P would be required to maximize any of the N rate applications.
While high fertilizer prices do not allow for nutrient rate applications beyond those needed by the crop, high crop prices call for high soil fertility to maximize yield. In light of current commodity and crop prices and the relatively inexpensive cost of soil analysis, soil testing for pH, P, K, and other nutrients suspected to be limiting is probably the single most important step towards increasing profit margins. Unfortunately, due to the many factors influencing N availability, presently there are no soil sampling strategies or tests that can predict N availability with enough accuracy. However, a range of optimum N fertilization rates can be obtained using a corn N rate calculator that takes into account yield and the price of corn and N fertilizer costs. This calculator was developed using data from many years and sites across Illinois and can be accessed at http://extension.agron.iastate.edu/soilfertility/nrate.aspx.
Once limiting factors have been determined, the next step is to develop strategies to meet the needs of the crop within the constraints of the budget. Some of the strategies to be discussed during the presentation include: applying the best possible rates of lime or nutrients to the fields with highest likelihood of response; maximize the efficiency of the nutrient by minimizing losses and by increasing its availability; accounting for all nutrient sources and nutrient pools already present in the cropping system; and determining which crop will perform better under the given conditions.