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Spring Nitrogen Fertilization of Hayfields in 2010: Will it Pay?

Authors as Published

Greg Halich (Greg.Halich@uky.edu), Farm Management Specialist, Department of Agricultural Economics, University of Kentucky

(Reprinted from the Economic and Policy Update, Vol. 10. No. 3, March 2010)

We are at the point where farmers would normally start to apply nitrogen to hayfields to boost spring and early summer production levels.  However, with a fair amount of hay leftover from 2009 and urea selling at over $400 per ton, many producers are questioning the profitability of this practice in 2010.  While the price of nitrogen is known with a high degree of certainty right now, the price that hay will ultimately sell for this fall and winter is not.  Thus, the question ultimately comes down to at what hay prices will nitrogen applications prove profitable this year? 

To help answer this question, the major factors that impact spring-applied nitrogen profitability were analyzed.  These include the price of nitrogen, price of hay, response rate of the nitrogen, nitrogen application rate, increased production costs from additional forage, improved quality of nitrogen fertilized hay, and additional P and K removal. 

The price of nitrogen was evaluated on an elemental (unit) basis between $.40-.50 per pound ($370-460 per ton urea).  Two application rates were evaluated: 40 unit applications (87 lbs urea) and 80 unit applications (174 lbs urea).  The response rate of nitrogen declined as application rate increased. The application cost for spreading the nitrogen was set at $5/acre.  Machinery and labor costs of producing the extra hay were estimated at $12.90 per 1200 pound bale (including moving to storage) and $1.36 per 45 lb small square bale (including moving to storage), both sold on the farm.  These costs include improved efficiency factors resulting from increased forage density and include mowing, raking, baling, and moving bales to storage for the additional forage produced.

Improved forage quality of nitrogen fertilized hay was accounted for by assuming a 1.0 ton yield without nitrogen, and valuing this hay at $5 and $10 per ton less than the nitrogen fertilized hay for round and square bales respectively.  Two scenarios were evaluated for P and K removal:  1) 100% replacement and, 2) 50% replacement.  Approximately 18 lbs of P2O5 and 50 lbs of K2O are removed for each ton of hay.  It was assumed that the cost of replacing P2O5 was $.35/unit ($485/ton of 18-46-0) and the cost of replacing K2O was $.45/unit ($540/ton of 0-0-60).  Keep in mind that even if a soil test does not recommend P and K applications for the current year, nutrients are still being taken from the soil and that they will have to be replaced at some point.

A range of hay prices were evaluated to determine which prices, if any, would result in profitable nitrogen applications this year.  With small square bales, nitrogen applications were consistently profitable at the 40 lb rate for hay prices of $2.50/bale and greater.  However, for large round bales, profitability of nitrogen applications occurred in fewer cases.  In general, round bales needed to sell for at least $70/ton with 100% replacement of P and K, and $60/ton with 50% replacement of P and K.  Moreover, 40 lb application rates were always more profitable than 80 lb application rates for round bale production.  For more detailed results, consult the publication “Profitability of Spring Hayfield Nitrogen Applications – 2010 Guide” (AEC 2010-02) available at:

http://www.ca.uky.edu/cmspubsclass/files/extensionpubs/departmentseries/aec2010-02.pdf 

Rights


Virginia Cooperative Extension materials are available for public use, re-print, or citation without further permission, provided the use includes credit to the author and to Virginia Cooperative Extension, Virginia Tech, and Virginia State University.

Publisher

Issued in furtherance of Cooperative Extension work, Virginia Polytechnic Institute and State University, Virginia State University, and the U.S. Department of Agriculture cooperating. Alan L. Grant, Dean, College of Agriculture and Life Sciences; Edwin J. Jones, Director, Virginia Cooperative Extension, Virginia Tech, Blacksburg; Jewel E. Hairston, Administrator, 1890 Extension Program, Virginia State, Petersburg.

Date

April 13, 2010


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