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Is Increased Production Worth the Cost of the Fertilizer?

By   /  January 25, 2021  /  9 Comments

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I recently had the pleasure of hosting a pasture walk for a group of University students, young people who wanted to chat about plants, animals, grazing, fencing, water…in other words, all the things I am constantly talking about. Our conversation included bits of philosophy too, and some thoughts about the direction of our industry. Somewhere in there I described my model as being extremely low-input, with no tillage, no seeding, and no chemical fertilizer. “I am seeking to operate on sunshine, rain, and management” –  my mantra, it seems.

After an hour or two of highly stimulating conversation we headed back toward the parking area. As we approached the gate, the leader of the group asked a question that I had not quite prepared for:

“John, why is there such a cultural bias that prevents so many American ranchers from adopting common practices that could improve the quality and quantity of their forages? Why is there such resistance to improving the soil or the sward or increasing production?”

What he was talking about was applying fertilizer.

Honestly, I was a bit taken aback. We had just spent an hour or more wandering around looking at what I considered to be pretty good looking fall pasture. Earlier, we had received some fall rains that had awakened the perennial grass from its summer slumber, and there was a group of calves grazing that regrowth, calves that looked like they were doing very well. Still, my pastures were certainly not dazzling. I had to think about the question for a few moments, finally responding in a non-scientific voice:

“Well, in my case, I guess I notice that all of the ranches that seek production over profit tend to go broke. All that equipment and fertilizer and seed, well, those things have to be paid for by calves that only bring $600 at market.”

Stan Parsons recently passed away. You can read more about him and the impact he made here. Photo courtesy of Dallas Mount.

What I was really thinking about was Stan Parsons’ voice echoing in my brain. Stan was the founder of Ranch Management Consultants and what I learned from him is one of the prime reasons I’m profitable today. Stan always said, “A farm may be able to support a ranch, but a ranch will never support a farm.”

I do have a bias, a paradigm or an absolute belief system really, founded on the idea that we must absolutely limit inputs because inputs are not economically viable if all we are producing is grass.

Grass is a low-value product. Cattle are most economically efficient when we are using them to harvest (scavenge) forage that no one else can use, forages that are grown on soil no one else can navigate.

Let me say right here, my feelings weren’t hurt, but I was somewhat…stimulated, put in a state of mind to spend some time and energy looking for data that would guide me in going forward. After all, I want to be doing the smart and profitable thing, right? To make smart decisions about fertilizer use, I need to know how much the fertilizer costs, how much forage it produces, and what the value of that extra forage is.

So, I did the math.

The Cost of Nitrogen vs the Value of Forage

Question #1: what does Nitrogen cost?

I made a few  calls to local suppliers and found that having Urea delivered and spread on my pastures will cost about $400 per ton. Assuming an application rate of 100 pounds of product (46 pounds of N)  per acre this works out to $20 per acre.

Question #2: how much additional forage will be produced?

There are many variables that affect outcomes in different locations, but I find many references to the idea that one pound of N produces about 20 pounds of forage (dry matter). So, the 46 pounds of N that we applied above will produce about 920 pounds of forage (dry matter) per acre.

Question #3: what is the value of the additional forage we produced?

There are several ways to calculate this, but my training says that the value of grass is determined by how much you could sell it to your neighbor for, or perhaps how much you might pay to buy it from your neighbor.

If you are letting a 1,000 pound cow (1 Standard Animal Unit or SAU) eat this forage and we assume that a bovine eats 3% of her weight each day, then that 920 pounds is remarkably close to the amount that 1 SAU cow would eat in a month.

Question #4: how much would you sell one SAU of forage for? Or perhaps, how much would you pay for a SAU of forage?

To answer this, I made a list of rental properties we manage and made some quick calculations to find how much I pay for an SAU (month) of forage. I also looked at the rates I am charging my custom-grazing clients. In the end, it appears that I am paying around $10 per SAU per month  for rental ground. If I were young and aggressive and expanding, I believe that over time I could continue to find more rental ground at that cost. And of course, each of those properties comes with some degree of labor overheads. This makes calculating their true value a bit squishy. But generally speaking, I believe I can rent land (buy grass) for about half the cost of producing grass with Nitrogen fertilizer.

Conclusions

At the risk of being harsh, it appears to me that increasing production of forage through the addition of Nitrogen fertilizer is economically unsupportable, for me at least. Of course fertilizer “works”, but the cost of production is simply too high if the only thing we are growing is grass. Maybe things are different if you are growing strawberries or almonds or cantaloupe, but if all you have is grass pasture, I would encourage producers sharpen their pencils and do the math before calling the fertilizer truck.

Best wishes and Happy Grazing to all of you in 2021!

For more on nitrogen as a fertilizer, check out this week’s article.

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  • Published: 6 months ago on January 25, 2021
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  • Last Modified: January 25, 2021 @ 10:42 pm
  • Filed Under: Consider This

About the author

John Marble grew up on a terribly conventional ranch with a large family where each kid had their own tractor. Surviving that, he now owns a small grazing and marketing operation that focuses on producing value through managed grazing. He oversees a diverse ranching operation, renting and owning cattle and grasslands while managing timber, wildlife habitat and human relationships. His multi-species approach includes meat goats, pointing dogs and barn cats. He has a life-long interest in ecology, trying to understand how plants, animals, soils and humans fit together. John spends his late-night hours working on fiction, writing about worlds much less strange than this one.

9 Comments

  1. Tom Krawiec says:

    Very thoughtful article John. Our HM instructors taught us to detest fertilizer as well, and I still hold that feeling within my soul. However, there comes a time when my tools as a grazier have not worked
    When pastures or hay land is so worn out that there is virtually nothing to work with, you have to do something different. In the same way a car requires gas to move forward, a pasture needs forage to improve. Forage begets forage even if that forage be ‘weeds’.
    As a custom grazier on rented land, we had the opportunity to take over a lot of worn out land. After eight years I finally had to admit that getting worn out land producing enough forage to be reasonably profitable was beyond my skills. That’s when I hired an agronomist who was getting amazing results with grain farmers.
    After soil testing and evaluating our financial constraints, he recommended 200lbs of ammonium sulfate. This amendment would produce the biggest bang for the buck. It was his thinking that we feed the legumes and the legumes would feed the grass.
    On a 20ac trial, we realized a 4-6fold increase in the first year! Those acres went from producing 45 SDA to almost 200 SDA. Put into dollars & cents, in our area, one SD (the amount 1 SAU cow eats in one day or about 24lbs DM) is worth $0.58/SD. That land went from grossing $26/ac to producing $116/ac. It’s a lot easier to raise a family when your land is grossing $116/ac vs $26/ac.
    The total cost of the fertilizer application was $64/ac (labour & equipment). We increased the profit on that land by $26/ac ($116/ac – $64/ac -$26/ac of original production = $26/ac). It is a one time application though when coupled with a well thought out grazing plan.
    Spending that kind of money just tears me up. However, I made the decision because I already knew what the results would be if I did nothing. I keep looking for a less expensive tool to get the same results with no luck thus far, other than bale grazing.
    I often hear reports of amazing results from adding non-synthetic amendments. Each time I track down the papers discussing the results or the producer who had the amazing results, the end result is the same; production doubled or increased 50%.
    If you start with bugger-all and you double it, you still end up with bugger-all. Going from $24/ac to $48/ac may be a huge increase, but it’s still not enough to raise a family without off farm income.
    In my experience, pastures become self propagating when they reach 170-200SDA. We need to get there as quickly as possible because our kids are not going to wait. If all they see is hard work and parents stressed out trying to pay bills, they will be gone as soon as the bell rings on the last day of grade 12!
    I think the bar for what we should expect from our pastures is set way too low which is why we accept the level of production we do. Synthetic fertilizer is a tool to help get our pastures cranking, it is not a way of doing business. That means it is something we can use for a specific purpose only, in the same way as ultra-high density grazing is a tool.
    Before I get off my soap box, it is my firm belief that no amendments should be done until a person has a handle on grazing. Learning to manage grass using a written grazing plan comes way before any synthetic fertilizer or organic amendment. Poor management can not be propped up with soil amendments and expect to be profitable.

    • john marble says:

      Gosh Tom, thanks for the comments, especially the last paragraph. And actually, there is another complicating factor in this entire conversation, one I avoided in favor of trying to maintain focus. Using chemical fertilizer to radically increase production brings one completely separate benefit: from a forage or hay standpoint, chemicals are a direct cost that increases production without significantly changing land overhead costs. In fact, one perspective would be that a doubling or tripling of production actually has the effect of radically reducing land overheads, at least on a unit of production basis. This is most apparent to hay making folks. Driving a baler around in circles making 3 tons per acre is a far different proposition from doing the same work and making one ton per acre.

      Gee, turns out nothing is ever as simple as it looks.

    • Troy Bishopp says:

      This conversation is why I like OnPasture. Thanks young men.

    • Albert Walsh says:

      Tom,
      I think what I’m hearing you say here is ‘I made the investment to get my fertility up on depleted ground by applying inputs, and once done, with grazing management I kept it fertile without any future inputs’, am I understanding that right?

      I’m debating making an investment in a poor producing field I own, but knowing that the nutrients will just keep cycling with good management once I get them there will make it easier to spend the money.

  2. Richard Moyer says:

    Thank you, John. A fellow grazer recently encouraged me to apply nitrogen to winter rye we both seeded last fall. I’ve not done so before, primarily due to soil compaction concerns during early spring. You give me more to chew on!

  3. John hits it on the head relative to nitrogen fertilization of pastures. On the other hand, when soil test P or K are below optimum addition of these nutrients to the soil (and lime when soil pH is below 6.0 for clovers) will stimulate clover in the stand and the clover will fix the nitrogen. These nutrients build soil fertility and are recycled to be used over and over again in a well managed pasture. In general when properly managed and when there is adequate rainfall clover-grass stands produce the equivalent yield of the grass when 125 to 150 pounds of nitrogen are applied.

  4. Troy Bishopp says:

    “limit inputs because inputs are not economically viable if all we are producing is grass.” I’m annoyed by the word “ALL”. It suggests it is not important, but it has so many more benefits than just production. Ah, always a backstory!
    Thanks for the inspiration to do my own research against my goals. I’ll be working on the phosphorus question soon. GW

  5. When I was in vet school in the early 1970s, the food animal professors consistently drilled into us the philosophy that the best medical decision is often not the best financial decision for the producer.

    • john marble says:

      Thanks Dave. Due in no small part to your excellent tutelage, I am very rarely called upon to make vet-medical decisions. For the most part, I try to avoid situations that call for such. Thankfully, economics (the “dismal science”) is fairly basic arithmetic. That is, not much science or judgement to it at all.

      Thank you for your help throughout the last forty years or so. Let’s go fishing.

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