Bookham says value, despite a hike
From the April 2008 edition of Agriculture Today.
Dramatic fertiliser price increases have caused many producers to question the value of applying it.
Superimposing current prices, the 13-year data set from the Bookham Grazing Demonstration site near Yass, conducted between 1993 and 2006, analysed the impact on profit from price increases.
The Bookham demonstration was set up with paired paddocks (12 hectares each), on native based pastures (microlaena, danthonia, sub and naturalised clover and annual grasses), to look at the economics of supering such country when grazing with Merino wethers for fine wool production.
The supered paddock over 13 years received an average of 112 kilograms per hectare each year, while the no supered paddock received no fertiliser.
The demonstration lies on a granite soil with pH (CaCL) 4.2 to depth.
The topsoil consists of a sandy loam to a depth of 50 centimetres and the subsoil consists of a heavy clay beneath 50 centimetres.
The stocking rate on the supered paddock has averaged 13.4 wethers/ha over the 13 years, while the no super paddock averaged 6.1 wethers/ha.
To investigate profitability of fertilising following price increases, a fertiliser cost of $400 per tonne spread (excluding GST) was applied for each of the 13 years to calculate annual gross margin. All other prices and production were left the same.
The profit from the supered paddock (13-year average) before raising the fertiliser price was $113.31/ha.
After allowing for the increased fertiliser cost, the average profit dropped to $96.38/ha.
The price increase for super removed $17/ha profit from the system.
The no super input system had a trial time profit of $34.55/ha.
Although these figures are specific for the Bookham site, the $17/ha profit reduction due to increased fertiliser price is robust across all locations for fertiliser applications of 112kg/ ha per year.
The reality of the fertiliser price increase is that the same amount of money will be spent to buy a reduced tonnage.
Consider the following factors when deciding which country to super:
- Is your stocking rate down? Will it be increased during autumn/winter 2008? If your answers are yes and no respectively, reduce the area to be fertilised to reflect the reduced stock demand
- Are your pastures badly affected by drought? Are species present to respond to improved fertility? A priority should be to fertilise any paddocks with perennial grasses and sub clover still present
- Work over the last six years has shown on Yass soils that 90kg single super/ha maintains soil phosphorous levels. So this maintenance rate could be used to increase the area of country covered
- Hill country or shallow soil areas should be avoided within paddocks. Fertilise those parts of paddocks which will give the best response - soil depth is the indicator. Many people did not fertilise last year, so another year missed will have a negative impact on winter production.
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