Source: Top Farmer Crop Workshop Newsletter, Purdue University


Although input prices for some inputs are down substantially, market prices for most crops are down, too. Economically optimum rates can be determined by calculating marginal rates of return. For nitrogen fertilizer, the ratio of N price per pound and the per-bushel price for corn should be a primary driver in determining the optimum nitrogen rate. The following chart shows that at current price ratios nitrogen is relatively less expensive compared to some recent years.


Corn Price/Nitrogen Cost Ratio, 2005 to 2010, Purdue Crop Budgets

Year Corn Price

$/bu
N Price

$/lb
Ration

N price/Corn price
2005 2.12 .26 .12
2006 2.31 .34 .15
2007 3.71 .28 .07
2008 5.00 .46 .09
2009 4.00 .49 .12
2010 F 3.30 .28 .08