High Nitrogen Prices Showed Cheaper Isn’t Always Better

Welcome to The Playbook, a new blog series from Sound Agriculture highlighting the strategies and successes growers are achieving on their farms. In each blog, real growers will share the experience and insight they’ve gained in the field.

Over the last few years, historically high synthetic nitrogen prices posed huge challenges to growers, who needed to provide appropriate nutrition to their crops when costs had more than doubled. Growers adopted new practices and approaches to reduce their reliance on synthetic nitrogen. With prices so much lower today than even a year ago, it may be tempting to return to business as usual and put the last few years behind us. But many growers are taking the lessons they learned to keep their costs low and their operations agile. 

With expertise provided by Kyle Mehmen of MBS Family Farms and Chad Scebold of Scebold Family Farms. 

When nitrogen prices started rising in 2021, they rose fast; according to one source, anhydrous ammonia started the year around $500 per ton, tripling that by the end of the year and finally reaching a peak of $1635 per ton in June 2022.

“Part of the problem is that there are basically three suppliers,” explains Kyle Mehmen of MBS Family Farms. ​“It’s almost like a monopoly and growers are at their mercy. And unfortunately nitrogen is something you can’t just bank up in low cost times. It’s so frustrating that it can cost three times as much, but there’s nothing unique that has changed about the product — nothing’s changed for 80 years.”

Many growers were forced to weigh the costs and benefits of maintaining their nitrogen plan. 

“When nitrogen prices are low, it can seem like an easy button for growers,” says Chad Scebold, a grower and SOURCE dealer based out of Omaha, Nebraska. ​“But nitrogen was over $1 per pound, and at that price, you need to start looking for alternatives and thinking about what you can do to optimize your nutrients.”

The recent price drop is good news for growers, but many are taking the lessons they learned to survive the peak to keep costs low and improve ROI. 

“The high prices made us look at different options to provide a more consistent pricing mechanism and allow us to be more flexible,” says Kyle.

One of the first things growers can do to stabilize nitrogen costs is look at optimizing their nutrient application. Applied nitrogen that’s not taken up by the crop and is money down the drain. 

“Consider what’s the right amount of nitrogen based on the cost,” says Chad. ​“What can you do to supplement the nitrogen to help the corn grow optimally? On our farm, our strategies revolved around nutrient management and knowing what nutrients the crop needs at which stage.” 

Healthy soils play a big role in optimizing nutrient application, in part because they support robust communities of beneficial microbes, which can provide growers with free access to both macronutrients, like nitrogen and phosphorus, and micronutrients.

“The high cost of nitrogen made us look even deeper into our soil and what we are truly capturing from mineralization and organic matter,” says Kyle. ​“We have a number of different soils on our operation, and each needs to be treated a little differently.” 

Understanding what’s going to work on a particular field with particular soils and management practices is the crucial first step for growers, as that will help growers decide which practices will work best. Variable rate technologies are one way to support the needs of different fields and soils, and practices like cover cropping, reducing or eliminating tillage, and even some innovative products can also help increase the availability of nitrogen.

All of these practices are in service of improving a grower’s nutrient use efficiency (NUE) score, a measure of the amount of nutrient used per bushel. A lower score represents less nitrogen used, and the less nitrogen used, the lower a grower’s costs and the higher their return, which was particularly helpful when nitrogen costs were high.

“We’re always trying to fine tune our NUE, and it’s really an art more than a science,” says Kyle. ​“There are some things we can do that don’t put our operation at risk and can keep our NUE manageable. In times of prosperity though, it’s easy to forget about that efficiency.”

With prices so much lower this year, it may be tempting to return to trying to maximize yield with abundant applications of cheap nitrogen. But Chad says the last few years have taught many growers that they can grow more with less nitrogen by understanding their soils and optimizing their nutrient use. 

“You have to find your limiting factor — what is limiting how well the crop will grow over time? It’s almost never nitrogen,” he explains. ​“Think of it like bodybuilding; taking in more protein gives you a better chance to build more muscle, but there’s a point at which protein alone won’t help. It’s the same for building a resilient crop — nitrogen isn’t always the answer, even when it’s cheap.” 

Another reason many growers are carrying the lessons and strategies from high nitrogen cost forward is that there’s a point of diminishing returns with nitrogen application.

“After a certain point, the benefit of using nitrogen falls off,” says Chad. ​“Nitrogen is great for the crop, but too much and the plant can’t use it all.” Unused nitrogen easily becomes a net financial loss for growers as the nutrient they purchased is lost to the environment.

Once washed off the field and into local water supplies and water bodies, nitrogen can have serious impacts on human health and the environment. Once in lakes, oceans and rivers, excess nitrogen can cause overgrowths of algae and other aquatic plants, reducing oxygen levels and even causing mass die-offs of fish and other organisms. High levels of nitrogen in groundwater or other sources of drinking water can have serious impacts on human health as well. By restricting oxygen movement in the bloodstream, nitrates can lead to blue baby syndrome in infants and research has even linked high nitrate levels to higher levels of pediatric cancer.

“Nitrogen runoff causes all kinds of problems,” says Chad. ​“In Nebraska, we talk about blue baby syndrome, but we also have high pediatric cancer rates.”

In the face of high nitrogen prices, growers adopted different management practices and tried out a variety of products in an effort to maintain farm finances. Many of those practices and products will continue to support more robust, resilient crops and higher ROI, but it starts with understanding the unique features of your own operation. 

“There is no one size fits, no silver bullet to addressing nutrient efficiency or saving yourself from high nitrogen prices,” says Kyle. ​“It’s just small increments of improvement in ten different places across your operation, based on your specific needs.” 

In general, Kyle says he looks for ways to increase organic matter and mineralization rates in his soils. MBS Family Farms has been cover cropping for about a decade and has introduced some reduced till and no-till, but they also use some products to help breakdown residues and increase nutrient availability, including SOURCEⓇ.

SOURCE is Sound Agriculture’s microbiome activator, a molecule that mimics the plant-to-microbe signal that attracts the right groups of microbes and life within the soil to make nitrogen and phosphorus more available to the plant. By stimulating the already present soil microbes, SOURCE can help increase crops’ access to key nutrients like nitrogen and reduce growers’ reliance on synthetic fertilizer inputs.

For Chad, understanding how much nitrogen your soil can hold and your crops can use is the first step to optimizing nutrient efficiency.

​“On my farm, I raise 250 bushels of corn every year with 180 pounds of nitrogen; I know that if I put out more, even if it’s cheap, my crop isn’t going to use it,” says Chad, adding that factors like how much moisture his fields receive, whether he’s used fungicide and other crop protection products like SOURCE help him keep his nitrogen use low.

Ultimately, Kyle says surviving the high nitrogen prices of the last few years has made MBS Farms more resilient.

​“It’s proved to ourselves that we can make significant changes when we need to, operationally and culturally, when it comes to how we’re accessing our nitrogen,” he says. ​“Whether it’s looking for different sources of nitrogen, implementing new innovations or management practices or responding to the weather, you have to be nimble in this industry.”