Any decision to fertilise wheat crops or not involves financial costs and benefits - highlighting the importance of incorporating economic information in decisions.

With urea and grain prices changing recently, the economic question for wheat growers is how wheat returns and costs change as more nitrogen (N) is added at sowing.

While the answer can tell us how much nitrogen to apply, this depends on the yield and protein responses to added N, and on prices of wheat and urea.

Let’s draw a picture of the N decision (top graph).

The important measure for the crop is the total amount of available (or nitrate) N at sowing - this could be already in the soil or added as urea or ammonia gas.

This is the horizontal axis, where the unit is kilograms N per hectare (kg N/ha) and the decision is how much N to apply from among these N levels.

On the vertical axis we put the economic consequences (benefits and costs) for each N level. The economic units are $/kg N/ha.

What might the relationships between returns and costs be at different levels of N? We expect that when there isn’t much N available to the crop the economic return from adding another kg of N will be high (point A) and when there’s a lot of N the returns from adding N might be low (point B).

The line AB is what we might expect the extra returns relationship to look like as we add more and more N.

'The economic question for wheat growers is how wheat returns and costs change as more nitrogen (N) is added at sowing.'

The extra costs of adding a kilogram of N are shown as CD.

The best level of N for the crop is at N*. If the measured level of N in the soil is N^S then the decision is to apply the difference between N^S and N* as shown.

As the N price rises to the dotted line C^|D^| we would expect the grower to apply less N, and the framework in the top graph shows how much this should be (the amount changes to N*^| ).

If the price of wheat rises then the returns schedule becomes A|B| and the best amount for the crop increases to N*^{| |} .

We can also include the effects of requiring a higher return on investment (ROI).

A 100 per cent ROI means that for every dollar spent on N we require a net return of two dollars prior to repaying the dollar borrowed.

Using a simulation model to predict yield and protein responses to added N and a wheat price (which varies with protein content) we can develop extra return and extra cost patterns for a wheat crop.

It is also possible to vary soil moisture and in-crop rainfall and develop information for different soil moistures and season types.

An example of this type of analysis is shown in the bottom graph, which relates to a wheat crop on a Vertosol soil at Gunnedah.

The picture is for medium soil moisture at sowing (120 millimetres) and the three return lines relate to very good, average and very poor in-crop seasons.

This framework can be developed for different soils, locations and prices and can provide valuable information to growers in making N fertiliser decisions.

Contact Bob Farquharson, Tamworth, (02) 6763 1194.