Economic Analysis of Nitrogen Fertilization of Smooth Bromegrass for Hay

Dry matter yield (DMY) data for smooth bromegrass (Bromus inermb Leyss.) from two N fertilizer experiments on Thin Black Chernozem (mic Cryoboroll) soils in south‐central Alberta were used to determine economic optimum N rates and returns above fertilizer costs for urea vs. ammonium nitrate (AN) using the net present value (NPV) criterion. The N fertilizers were broadcast. In the first experiment, AN was applied annually in early spring at 0,SO,100,150,200,250, and 300 lb N/acre over 19 yr. In the second experiment, urea and AN were applied annually at 100 lb N/acre in early fall, late fall, early spring, and late spring over 15 yr. The NPVs from N fertilization decreased markedly when the N fertilizer cost to hay price ratio was increased from 7 to 16, but the optimum N rate remained relatively constant at 100 lb/acre. The NPVs were generally greater with AN than urea as the N source. Further, NPV was highest when the N fertilizer was applied in early spring and lowest when it was applied in early fall. The difference in NPV between N fertilizer sources narrowed with late spring application, because AN and urea tended to be equally effective in increasing forage yield. When the market value of protein in forage was considered in the economic analysis, the NPVs increased with use of N fertilizer, and the NPV benefit of AN and urea became greater, particularly for early fall application. We concluded that the application of N fertilizer was profitable, and that AN at 100 lb N/acre rate, was the preferred source of N for established grass stands. Research Question Traditionally, farmers have used ammonium nitrate (AN) as the source of N fertilizer for perennial grass. Recently, urea has become the dominant form of dry N fertilizer because of its higher N content and lower unit cost. Broadcasting is the most convenient way to apply N fertilizers on established grass stands. When exposed to a moist soil surface, urea after hydrolysis is vulnerable to N loss by volatilization. Economic analysis of both the rate and source of fertilizer N are important for grassland soils. Literature Summary Bromegrass is a major forage crop for grazing and winter feeding of beef cattle. Most agricultural soils are deficient in plant‐available N and grass production is increased dramatically with N fertilization. Net returns from N fertilization and the most economical rates of N are influenced by the yield response of grass to applied N, which is affected by soil‐climatic zone, precipitation, N source, price of hay, and cost of N. Information is limited on net returns from urea vs. AN on grassland. Study Description This study evaluates the economic optimum N rates for AN, and compares the returns above fertilizer costs of urea vs. AN on established grass stands using the net present value (NPV) criterion. The NPV returns are also compared among various times of application for urea and AN. Data on dry matter yield (DMY) of smooth bromegrass were obtained from two long‐term experiments. In Exp. 1, AN was annually applied in early spring at 0, 50, 100, 150, 200,250, and 300 lb N/acre over 19 yr (from 1968 to 1986) at one site. In Exp. 2, urea and AN were annually applied at 100 lb N/acre in early fall, late fall, early spring, and late spring for 14 yr at two sites (from 1975 to 1988) and for 15 yr at another two sites (from 1974 to 1988). In both experiments, the soils were thin Black Chernozem. The N fertilizers were broadcast. The experimental design was a randomized complete block with six replications. Bromegrass was harvested for hay yield, and the dried and finely ground plant samples were analyzed for total M to estimate crude protein content in forage (% total N × 6.25 = % crude protein). The economic analysis was conducted with the widely used NPV investment evaluation criterion. The NPV is the net benefit or value a farmer may expect to earn from applying fertilizer, after allowing for the cost delay and risk. For Exp. 2, the NPV calculation considered fertilizer cost by using various ratios of AN cost to hay price, urea cost to AN cost, and a ratio of fertilizer costs in spring and fall. To determine the possible impact on NPV from an increase in crude protein content in forage from N fertilization, a protein‐adjusted hay price was estimated. Applied Questions What was the economic optimum rate of N for bromegrass hay production on a Thin Black Chernozem soil? The NPVs generally increased with each increment of N fertilizer application, but the N rate which maximized NPV varied from year to year due to lack of timeliness and amount of precipitation received. The NPV decreased with increasing fertilizer N cost to hay price ratio, but the highest NPV was obtained at 100 lb N/acre rate across a broad range on N fertilizer costs and hay prices. At the economic optimum N rates calculated in this study, there is little risk of accumulation of nitrate‐N in the soil profile or in the forage so as to be potentially toxic to livestock. Did lower costs per unit of N for urea than AN have any effect on NPV returns? When the cost of urea was lower relative to AN (Le., ratio of 0.80), the NPVs in urea treatments increased but, in most cases, remained below those in AN treatments. This is because urea was less effective than AN in increasing forage yield. Net returns were highest when N was applied in early spring and were lowest when the N was applied in early fall. What was the impact of protein content in bromegrass hay on NPV returns? Protein content in forage increased with N application and was generally higher with AN than urea. When the market value of protein in forage was considered in the economic analysis, the NPV increased with use of N fertilizer and the NPV difference between urea and AN became even greater, particularly for early fall application.