Economics around variable-rate fertilizer challenging

The reasons variable-rate application has had lower adoption is a lesson for new ag technologies

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There are good financial reasons that variable-rate application of nutrients hasn’t taken off like automated guidance.

Guidance systems for farm equipment ensure complete coverage without overlap, University of Guelph Professor Alfons Weersink told the 2020 FarmSmart Conference recently at the university. That means savings of $8 per acre for planting.

That’s enough to make it pay, but it also has the advantage of making the job easier and less taxing on the tractor operator.

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Why it matters: Understanding why some technologies are adopted and other are not, can help determine the potential of new agriculture technologies.

The ability to maps zones in fields and to change the rate at which products are applied has meant the ability to switch up how much is applied in productive and unproductive areas of the fields.

Weersink says there are three types of agriculture technology in crops including geographic — which includes guidance, observational — including yield monitors and mapping and variable rate application.

The first two areas have been adopted extensively, but variable-rate application has not.

The concept makes sense: use new technology to target areas which really need the fertilizer and reduce use where it is not of value. It should save money in less and more accurate application of nutrients as well as being better for the environment.

However, Weersink says adoption rates across crop farms are low, although Ontario with 60 per cent of farmer using custom nutrient applicators, has a higher rate of adoption of variable-rate application than Western Canada.

The problem is that there’s great variability in what nitrogen can be applied to get the best net return.

A reduction of five per cent just doesn’t save that much money.

If 22 kg per hectare of nitrogen is applied, the net return is $380. If 80 kg per hectare of nitrogen is applied — the net return is still $380.

Varying the nitrogen rate within the vicinity of the optimum doesn’t make much difference on profit.

Adding or subtracting 30 kg of nitrogen per hectare will get you within $10 per hectare of maximum profit.

Simply put, there’s a large margin of error in choosing the optimal nitrogen rate, so for most farms, at this point it doesn’t pay.

There’s more gain in applying a high rate every year in case that’s a high yielding year, versus overapplying in a low yield year.

Then there’s the extra work.

Variable-rate technology is information intensive. It needs the data to drive the decisions, so additional skills and tools are needed. There’s also the time and management needed to create the maps needed to run the variable-rate equipment.

GPS guidance doesn’t require nearly as many steps.

What drives precision agriculture adoption?

Weersink says there are several factors that drive precision technology to farm-level usefulness including:

  • A valuable output from the process that can be easily managed. For example, an individual cow produces more of a valuable commodity than does an individual corn plant.
  • There’s a short turnaround cycle. A cow can be milked three times per day versus a corn plant harvested once per year. Greenhouse production attracts technology because a pepper plant production cycle is also shorter than that of a corn plant.
  • There are small uncertainties that can be managed, such as animals managed in a barn. This fact makes any area influenced by weather less easily influenced by technology.
  • The technology exists to make it happen.

When one looks at all of those factors — worrying about optimal nitrogen rate in a production season with many variables “might be one of the small things not to sweat.”

Weersink had a question about over application of nutrients, if variable rate isn’t going to be widely enough adopted to solve that problem.

He says that in other research, the fertilizer application rates of farmers were examined. The vast majority of farmers applied around the average rate of nutrients. Only a few used “outrageous” rates, so targeting those farmers could be a high-return activity.

About the author

Editor

John Greig

John Greig has spent his career in agriculture journalism and communications. He lives on a farm near Ailsa Craig, Ontario. Contact John at [email protected] or follow him on Twitter @jgreig

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