What is your biggest crop production expense as a Cornbelt farmer? Unless you are hiring workers to hand weed your fields, your biggest cost is fertilizer, and with USDA’s fertilizer use and cost data just released, it is interesting to track trends and costs. Fifty years ago the ratio of N, P, & K applied to farmland was nearly equal. Not so today, and there is no surprise that nitrogen has taken command of your budget.

U.S. Department of Agriculture economists have published a 32 table report on U.S. fertilizer use and price, with most data going back to 1960 and carried through 2009 or 2010.  As an overall picture in 1960, 7.4 million tons were used, ranging from 2.7 million tons of nitrogen to 2.1 million tons of potash. In 2009, that had risen to a 17.7 million ton total, with 11.4 million tons of nitrogen, and about 3.1 million tons each of phosphate and potash.  However, the 2009 data is substantially lower than 1981, which saw a 23.6 million ton total, and nearly 12 million tons of nitrogen.  In actuality, from 1960 to 1980, fertilizer use grew 1 to 1.5 million tons per year, and since the high water mark in 1981, the trend has been flat to slightly downward. Most of the past 30 years it has been 21 to 22 million tons, but recorded a 4 million ton drop from 2008 to 2009. Interestingly, nitrogen has risen from 37% of nutrient application in 1960 to more than 64% in 2009. Phosphate has fallen to an 18% share and potash is just over 17% of nutrient application, with both on a flat to lower trend. Potash has only dropped 10 percentage points in the past 50 years, although there was a 4 point drop from 2008 to 2009.  Phosphate dropped 10 percentage points from 1960 to 1980, and has been reasonably flat since then in its share of the nutrients applied.

About 1.6 million tons of nitrogen were applied to corn in 1964, but that number quickly grew to peak at 5.6 million tons in 1985, before flat trend for the past 25 years in the four million ton range. Phosphate application to corn has 1.5 to 2.5 million tons per year since the late 1960’s and potash application has usually been in the 2 million ton range annually throughout the period.

Beginning in 1964, 353 thousand tons of nitrogen were applied to wheat, and that steadily increased to just over 2 million tons in the mid-1990’s when the application volume began to decline to the 1.4 million in 2009. Phosphate and potash application volumes on wheat have remained generally stable.

There has been more than 100 thousand tons of nitrogen applied to soybeans for most years since 1977, but the trend has been generally flat. Soybeans have received a phosphate application that increased to more than 600 thousand tons in 1979, but has declined to 300 to 400 thousand tons since that time. Potash application on soybeans steadily rose from 70 thousand tons in 1964 to over one million tons in 1997, but has been cut in half in the last 13 years. 

Fertilizer prices show rather unusual patterns in a table.  For example, anhydrous ammonia was more than $140 per ton in the early 1960’s, but fell to half that amount in the early 1970’s, then rose to the $200 per ton range from 1980 to 2000. Since that time, prices have edged upward to the high of $749 per ton for the 2011 crop season. Most other forms of fertilizer were less than $100 per ton from 1960 to 1974 when prices began to edge higher, but most remained under $250 per ton until the last 5-8 years, when price increases climbed steadily upward.

The application rates previously mentioned are detailed by USDA’s fertilizer study when state by state application rates are examined over the past 50 years. The average application rate per acre in 1964 was 58 pounds, but ranged as high as 85 pounds in North Carolina and 79 in Nebraska. The national average surpassed 100 pounds per acre in 1968, pulled up by the 149 pound rate in Nebraska. Many other Cornbelt states were well under the national average at that time. The national average generally was in the 130 pound range from the mid-1980’s to well after 2000. During a 16 year period, Illinois farmers averaged more than 160 pounds of nitrogen per acre in 8 separate years. The national peaks may have been the 178 pounds per acre in Kentucky in 1999 and Indiana in 2010. It should be noted that many states did not record fertilizer use every year of the survey. For 2010, the national rate was 140 pounds per acre, lead by the 177 pounds in Georgia and 178 pounds in Indiana. The fertilizer data for each state was not collected between 2006 and 2009.

Summary:
Over the past 50 years substantial increases have been made in fertilizer consumption for crop application in the U.S. While phosphate and potash application have barely doubled, nitrogen application has essentially quadrupled. While it is easily argued that in the same period of time yields have increased, along with the dollar value of the crop, all factors have contributed to the economic dynamics since 1960. 

Source: FarmGate blog