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The Economic Potential of Alternative Nutrient Sources

Posted Apr. 1, 2010

When visiting with cattle producers across southern Oklahoma and northern Texas, I often hear that commercial fertilizer is too expensive to purchase for their operations. These comments have come from both cow-calf producers and stocker operators. To help determine if fertilizer prices are pricing them out of the market, there are two options a producer can consider to see if they can afford conventional fertilizer.

Option one is to project what the profitability of the cattle operation would be if fertilizer is not applied and compare it with the profit that is typically generated when fertilizer is applied. Option two is to compare the profits when commercial fertilizer is replaced with alternative nutrient sources. These sources include feed yard manure, chicken litter or annually established nitrogen-fixing legume crops. Another way to offset fertilizer needs is to purchase feed and hay from off-site, reducing the need for additional standing forage.

Research has shown that each additional pound of nitrogen (N) applied will produce 30 additional pounds of bermudagrass, given that potassium (K) and phosphorus (P) levels are adequate. Therefore, applying 60 pounds of nitrogen should create 1,800 pounds of additional forage. The price of dry urea in these early months of 2010 (46-0-0) is 46¢ per pound of actual N, plus $5 an acre for custom application. Using this information, it would cost $36.221 to produce an additional ton of forage, providing that P and K levels are adequate. However, between 1999 and 2003, 50 percent of soil samples received by the Noble Research Institute showed an independent deficiency in P and K. If a soil sample shows a need for P and K, the cost of increasing forage production increases.2 If 60 pounds of both P (37¢ per pound) and K (44¢ per pound) are applied with the nitrogen, the cost for an additional ton of forage increases by $54.3 This creates a fertilizer cost range of $36.22 to $90.22 (the cost of N, P and K) per ton, depending on the P and K levels in the soil.

We can use this base price to compare the economic potential of nitrogen substitutes. If a producer can find similar quality hay delivered and fed cheaper than $36.22 and $90.22 per ton, they would be better off not applying conventional fertilizer. Most operations will be hard pressed to find quality hay for $36 per ton this summer, but probably will not struggle to find it for less than $90 per ton.

A byproduct such as soybean hull pellets can be used to replace standing forage on a nutritional basis pound for pound. However, at current price projections it would cost approximately $130 per ton, not including storage and feeding costs. In this example, using soybean hull pellets would be less profitable than using conventional fertilization practices.

The nutrients in poultry litter can be highly variable, but the average is 60 pounds N, 60 pounds K2O and 60 pounds P2O5 per ton. To determine the potential of using poultry litter, producers can utilize the Value of Poultry Litter Calculator (Excel spreadsheet) developed by the Oklahoma Cooperative Extension Service. Using a current purchase price of $15 per ton, custom application rate of $7 per ton and transportation cost of $3.25 per loaded mile (25 tons per truck), the calculator estimates a breakeven distance of 250 miles. This implies that for distances less than 250 miles, the profit from using poultry litter (assuming N=60, P=60 and K=60) is greater than supplying N, P and K from commercial fertilizer. At half that distance (125 miles from a source of poultry litter), producers would be about $20 more profitable for each additional ton of forage produced compared to commercial fertilizers. At distances greater than 250 miles, producers would be better off using commercial fertilizer.

As in most analysis, the decision to apply conventional fertilizer or not is dependent on many factors. The question can be answered with good records, a soil test and a nutrient analysis. For more information, please contact me at 580-223-5810.

2Once soil nutrient levels are adequate in grazed areas for P and K, additional P and K will not be needed for approximately five years.