A quick check on the effects of N costs on spring N rates

Does the recent increase in nitrogen (N) cost and the increase in corn grain price warrant a change in nitrogen rates in 2021?  The following discussion gives an overview of the current N cost and corn price situation New crop corn for delivery during the fall of 2021 was $4.05 per bushel locally on January

Does the recent increase in nitrogen (N) cost and the increase in corn grain price warrant a change in nitrogen rates in 2021?  The following discussion gives an overview of the current N cost and corn price situation

New crop corn for delivery during the fall of 2021 was $4.05 per bushel locally on January 10, 2021.  And the price of a ton of anhydrous ammonia was $415 per ton the fall of 2020.

Fast forward to April of 2021 and new crop corn for delivery in the fall of 2020 is $4.60 per bushel and anhydrous ammonia is $690 per ton.

A quick look at the Corn Nitrogen Rate Calculator can give us some answers.

 

                                                                        spring 2021     fall 2020

Nitrogen price ($/lb)                                       0.42                 0.25

NH3 cost ($/ton                                              690                  415

Corn price, ($/bu)                                           4.60                 4.05

MRTN rate (lb N/acre)                                   143                  153

Net return to N at MRTN rate ($/acre)           252.60             240.07

NH3 cost at MRTN rate ($/acre)                    60.06               38.25

 

This info shows a 66% increase in the cost of N from last fall to this spring.  Corn grain price has increased about 13% since January.

So, should the N rate be adjusted as a result of a greater increase in the cost of N as compared to the smaller increase in the value of corn grain?  This info – based on the Corn Nitrogen Rate Calculator would suggest a 10 lb/a reduction in N rate.  Obviously, the increased value of corn grain did not make up for the increased cost of ammonia. 

Many agronomists and farmers would argue the practicality of an N rate reduction by 10 lb/acre.  However, this info does show the importance of N fertilizer. So even though N costs have increased over $21/acre since last fall in this example – the net return to N fertilizer is only reduced by about $12/acre as a result of the 66% increase in anhydrous ammonia cost.

This scenario was calculated with anhydrous ammonia, a corn soybean rotation and in the main part of Iowa.  The Corn Nitrogen Rate Calculator would allow you to evaluate other rotations, other N sources and other geographies. 

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