It still pays to apply nitrogen despite fertiliser price increases

Applying bagged nitrogen to grassland and cereal crops still works out cost effective versus having to buy-in feed, despite escalating fertiliser costs.

With the increased cost of fertiliser adding an extra 2ppl from June 2021 for the 50% of dairy farmers that didn’t forward buy, some could be temped to cut back on nitrogen applications this spring. However, calculations carried out by Graham Ragg, Senior Agronomist for Mole Valley Farmers shows that even with 34.5 AN at £640/t, it pays to apply it to grassland in order to get the most from first cut grass silage.

“First cut is the highest yielding and best quality grass silage.  Even with nitrogen at £640/tonne it still represents a third of the cost of alternatively buying in extra compound feed to give the same energy,” Mr Ragg explains.

Maximising grassland performance

However, he stresses that this assumes a farm has good quality grass which yields 20-30kg of grass dry matter in response to 1kg of nitrogen. Grassland management skills also need to be top notch in order to utilise and convert up to 85% of grazed grass and 75-85% of silage into milk - something the top 25% of dairy producers are achieving.

"Where grass utilisation in the bottom 25% of grassland managers is down to 40 to 60%, the financial return by using fertiliser is much less,” he adds.

Mr Ragg says the maths adds up whatever the type of nitrogen applied, as long as these management factors are in place (see table).

Cereals

The same can be said for cereals. Calculations show that the cost of growing spring barley has increased by £77.68 per acre compared to last year because of higher fertiliser, fungicide and seed costs. However, grain prices have also risen from £135/t to at least £200/t. With expected yields of 2.5t/acre this equates to a gross output of £600/acre for grain and straw producing an extra gross income of £84.82/acre over and above last season’s return after taking into account the increased growing costs from this year’s crop.

“So instead of a knee jerk reaction to high ammonium nitrate costs of either not buying any, or reducing the amount you buy, the logical thing is to evaluate its usage on your own farm,” Mr Ragg says. “There is the opportunity to get a profitable return on your investment as output prices look as if they are more than keeping pace with increased input prices in the arable sector.”

And even if farmers aren’t selling their cereals, it still pays to produce homegrown feed considering the price of straights and compounds are also going up.

Focus on soils and slurry

However, Mr Ragg says the ‘new era’ of higher fertiliser prices, means more emphasis should be placed on soil nutrition, structure and health, together with sward composition and the judicious use of bagged fertiliser to supplement supplies from clovers, slurry and FYM.

“To stay ahead farmers need to be better at converting grass to milk as it still offers the opportunity to be a third to half of the the cost of buying in extra feed,” he adds. “To achieve this, all farms need to re-evaluate soil testing, the need to reseed and the use of muck and slurry.”

In order to get the most from slurry and potentially decrease fertiliser inputs as a result, he advises using a slurry additive.

Applying Mole Valley Farmers’ Slurry Additive to slurry has been found to retain 60-80% more nitrogen that would normally be lost as ammonia. This works out very cost effective. For example, a 100 cow herd would  need 6kg of additive at £360. This could deliver an extra £7,000 of nitrogen, bringing nearly a 20:1 return on investment. In addition, an additive can also help reduce odour, crust formation and the need for mechanical mixing.

Fertiliser product comparison (assuming equal response to N)
  AN 35.5 Urea 46% CAN 27%
Price per tonne £640 £740 £630

Additional 200kg N applied/ha Assuming 1kg N (nutrient) results in an extra 20kg of grass dry matter

200 kg N/ha 200kg N/ha 200kg N/ha
Extra dry matter/ha produced 4,000kg (or 4 tonnes) 4,000kg (or 4 tonnes) 4,000kg (or 4 tonnes)

Extra milk produced from 4 tonnes extra dry matter per hectare assuming 11.0 MJ per kg/dry matter and 5.3 MJ needed per 1 litre milk

8,300 litres/ha 8,300 litres/ha 8,300 litres/ha
Milk return from extra 200 kg/ha applied N at 30p/litre per hectare £2,490 £2,490 £2,490
Feed requirement to replace extra forage kgs 4,150 (4.15 tonnes) 4,150 (4.15 tonnes) 4,150 (4.15 tonnes)
Cost of fertiliser per ha (200 kg N) £371 (£1.86 kg/N) £371 (£1.86 kg/N) £371 (£1.86 kg/N)

Cost of feed to replace forage (feed at £250/tonne)

£1,037 £1,037 £1,037
Saving on feed cost by using fertiliser instead  of concentrate per hectare £666 £716 £571

Assuming: Good pH status and swards with 50 to 90% perennial ryegrass/clover content, with satisfying phosphate and potash levels and an equal response of grass growth to 1kg N from AN, Urea and CAN. RB209 Fertiliser Handbook gives a response rate of 20 to 30kg of grass dry matter per kg N.

For further information contact one of the teams today:

Arable team 01769 576232        Fertiliser team 01769 576272

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