31 July 1998

Overseas AN not cheaper in practice?

AMMONIUM nitrate or urea imports could be a tempting buy this season; profits halved on many farms last year, and 1998 is expected to be no different.

Faced with that pressure, typical savings of about £12/t over UK-made ammonium nitrate, which could be realised if fertiliser prices rise, look more attractive than ever.

But the latest research carried out by one UK maker, Hydro Agri, suggests such headline savings are not realised in practice, even at current cereal prices.

Hydros 40 years of trials data shows imported AN or urea typically depress yield of winter wheat by 2-3%, says the companys Jim Lewis. While growers may be aware of that, they may be surprised how much cheaper imported product has to be to make up for the loss, he points out.

The problem with urea is its small prill size, which causes poor and uneven spreading, especially at wide bout widths, he says. Those using pneumatic spreaders do not escape; agronomic losses also occur due to volatilisation.

Imported AN often suffers from poor quality control and production methods, adds Dr Lewis. High temperatures at prilling cause brittle and hollow prills which may shatter when spread. Batches vary, and there is no guarantee of consistency, he maintains.

The firm has developed a computer model to calculate the price urea or imported ammonium nitrate would have to be to offset various yield differences. In this case, the model assumes a farmer is treating two winter wheat crops with 180kg/ha (144 units/acre) of nitrogen (table 1). One yields 8t/ha (3.2t/acre), the other 10t/ha (4t/acre), when treated with a UK-made product like Extran. The model assumes this product costs £90/t, and the wheat is worth £74/t.

If the farmer uses imported AN on the potential 8t/ha crop and suffers a 1% yield loss, he should pay no more than £79/t or he will be out of pocket. A 2% yield drop means he would have to buy the imported material for £67/t or less, and at a 3% yield drop, he can afford to pay a maximum of £56/t.

To offset the same yield losses using urea, he would have to source the material for £105, £90 and £75/t, respectively. In the 10t/ha crop, the differences are even bigger.

Farmers should not be tempted to cut back on fertiliser, even when the cereal price falls, adds Dr Lewis. Even at £60/t, the return is still about £4 for every £1 spent (table 2). &#42

Table 2: Fertiliser cost/return ratio

Wheat price Fertiliser price

£85 £90

£60/t 4.06 3.83

£65/t 4.40 4.15

£79/t 4.74 4.47

£75/t 5.07 4.79

£80/t 5.41 5.11

Table 1: Nprice comparison – discount on imported AN/urea needed to offset yield loss

Winter wheat, worth £74/t, and Extran priced at 90/t

Rate of N applied 180kg/ha

Expected yield 8t/ha 10t/ha

Yield loss expected 1% 2% 3% 1% 2% 3%

Imported AN price (£/t) 79 67 56 76 62 47

Urea (46%N) price (£/t) 105 90 75 101 82 63

Source: Hydro Agri.