Maximize 2011 Investments in Crop Inputs

Few investments offer the level of return of fertilizer

PLYMOUTH, Minn. — As corn growers know all too well, surviving today’s highly competitive economic environment depends upon investing wisely in areas that provide positive return. And with corn prices moving up and up, and global demand for grains increasing, corn production is no different. As growers plan for 2011, they must balance the choice between minimizing input investment to protect liquid cash and maximizing profit through higher yields.

No simple task, when the two are so intertwined. In corn production, fertility is responsible for about 40 percent of the crop’s yield, based on multiple university studies. And, fertilizer is proven to provide growers a positive return on their investment (ROI).

“For 2011, growers can’t afford not to apply phosphorus and potassium,” says Dr. Dan Froehlich, agronomist with The Mosaic Company. “Soil test trends reported recently by the International Plant Nutrient Institute indicate soil test levels for P and K continue to fall, likely causing a negative impact on yields.

“With the price adjustments we’ve seen to fertilizer and grain prices during the past year, the return on investment growers will receive for fertilizer is actually in line with levels from 2006 and 2007,” Froehlich points out. “It’s not too late for growers to work with their local fertilizer dealer to understand the importance of balanced crop fertility, nutrient interaction and soil nutrient levels in order to apply the proper nutrition that will maximize crop production and, ultimately, yields.”

The chart below demonstrates the dollar return per dollar spent per acre for the fertilizer investment on corn each year since 2008 (Click here to download image).

ROI Chart


And, to calculate the return from fertilizing their own corn crop, growers can use the following formulas.

Dollar return per dollar invested = (0.40 x yield x new crop price)/cost of fertilizer
Fertilizer cost per bushel = fertilizer cost /yield
Bushels needed to pay for investment in fertilizer = fertilizer cost per acre/new crop price per bushel

Corn fertilizer costs are based on budgets from Iowa State University for corn following soybeans and assume a yield of 180 bushels per acre and application rates of 140 lbs of nitrogen, 70 lbs of phosphate and 55 lbs of potash per acre. See Fertilizer Economics at Back-to-Basics.net for details of this analysis.

Agronomy resources for growers

The Mosaic Company offers a wealth of agronomy resources to growers, including the new 2011 Balanced Crop Nutrition Guide, on Back-to-Basics.net, a site dedicated to providing agronomy information to growers and the crop production industry. For more helpful production information, visit Back-to-Basics.net.

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