The increasing cost of energy, along with higher demand, has had a profound impact on the cost of fertilizer.  Nitrogen (N) is now pushing $0.40 per pound when not too many years ago it was half that price.  It was 15 years ago that the University of Wisconsin adopted a soil-based N recommendation program for the state’s corn growers.  We were the very first state to do so.  Since that time, several other states have moved from a yield goal based system to one that more resembles that of Wisconsin.  Recently, all of the Midwestern states have decided to implement a uniform soil-based approach for making N recommendations.  That’s not to say that the recommendations will be the same for every state, but the approach will be. 

Economic Flexibility

        The new N recommendation program is based on economics but with a high degree of user flexibility.  That is, no longer will there be a single rate that applies to the majority of localized situations.  As in the past, it was developed using multiple N-rate response research trials. Unlike the previous system, the recommendations include N applied as a component of starter fertilizers.  Some of the key terms to know when using the program are as follows: 

N ($/lb) : Corn ($/bu) Price Ratio – the N:Corn price ratio is determined by dividing the N price by the expected corn price that you will receive or the value of corn as a fed commodity.  For example, if urea (46-0-0) is costing $380 per ton, the N cost is $0.41 per lb ($380 per ton divided by 920 lb. N per ton).  If we expect to get $2.25 per bu for corn, the N:Corn price ratio is 0.18 (0.41 divided by $2.25). 

MRTN – this is the Maximum Return To Nitrogen rate.  The MRTN rate maximizes the return to nitrogen taking into account N price, corn price, and expected yield. Beyond this rate, the cost of N is greater than the value of additional yield.  Hence, the MRTN rate does not maximize yield, but rather maximizes economic return. 

Low and High Rate – the low and high rates are those rates where expected return will be either $1.00 below or $1.00 above the MRTN.  This offers producers an N rate range from which to work within.  

        The new N recommendations for high yield potential soils when corn follows corn are presented in Table 1.   

Note that the economic N rate ranges from 165 lb N/ac at a N:Corn price ratio of 0.05 to 105 lb N/ac at a ratio of 0.20.  In 2006, if all applied N is purchased, even an optimistic corn price of $2.60 won’t yield a N:corn price ratio much better than 0.15.  The MRTN in this scenario is 120 lb/ac.  Keep in mind that if corn is purchased for feed, the “value” is generally higher than a market price.  In this case, use the purchased value.  Similarly, some corn producers routinely take advantage of market tools that yield them considerably more than harvest time prices.  Again, use the value of corn on your farm. 

        To be sure, N is not an exact science.  It’s subject to the whims of nature in terms of denitrification and leaching losses.  Guessing the “exact” market to obtain an “exact” N rate is difficult.  Note that there is considerable overlap in economic rates across a range of N and corn price conditions.  For example, selecting a N rate of 120 to 135 lb/ac will profitable across a range of situations. 

No More N Credit for Corn After Soybeans

        The standard 40 lb/ac N credit for corn after soybeans will no longer exist.  Rather, based on multiple research trials, a separate table will be used for these situations.  Economic N rates for corn following soybeans are as follows: 

        Comparing Tables 1 and 2, the differences between N rates with the same N:Corn price ratios are 20 to 25 lb N/ac.  Again, there is some overlap between price ratios. 

Using the New Program

        The new UW  program offers a greater degree of flexibility, but also demands a greater degree of decision making.  It’s much less “one size fits all” because under today’s economic conditions, one size doesn’t fit all.  Further, the economics of 2006 don’t translate into maximum yield equals maximum profit.  This program will result in capturing 95 to 97 percent of maximum yields.  It is a program that can change as more data is collected in future years and has utility as economic conditions change.  Remember, the fundamental approach to determining economic N rates is still the same today in Wisconsin as it was in 1990, but what has changed is the dramatic rise in the cost of N.  See the article on Page 3 for further information on the new N recommendation program. 

Lesson 2