Can you make money with variable rate fertilizer technology (VRT)? The classic answer to that question from one long-time Alberta farm management specialist at a recent workshop: Yes, no and it depends.
The economics can be there on some fields and not others, says Ted Darling, who examined the costs and returns on three fields on one central Alberta farm in 2009.
Overall, on roughly three quarter sections where variable rate fertilizer application was compared to a conventional single fertilizer treatment, the farmer had a net gain of roughly $4,000 to $5,000 or about $11 to $12 per acre.
“In looking at this one case, for one year this producer invested a total of about $5,000, he had a yield advantage/savings worth about $10,000 for a net return of about $5,000,” says Darling. “That’s a pretty decent return.”
The caveat that does apply to this study, says Darling, is that not every acre, or every field produced a profit under VRT.
YOU WIN SOME, YOU LOSE SOME
This farmer in the Ponoka/ Lacombe area has been involved in VRT for a few years. For this look at the economics, Darling compared the cost and returns of VRT rates, with conventional rates, as well as check strips, which received no fertilizer at all.
On one 132 acre field after considering yield, fertilizer costs and other costs associated with VRT, the field actually had a loss, or a negative return, of $153, compared to conventional. On another 143 acre field of barley after considering all costs and returns of VRT, the field had a loss, or negative return, of $548.
On the third field, 143 acre field of wheat, however, the VRT on that field had a positive return of between $4,000 and $5,000 over conventional.
USE A PART IAL BUDGET TO DETERMINE COST SAVINGS
Darling analyzed the cost of VRT versus conventional through an accounting tool known as a partial budget. The partial budget doesn’t look at overall farm income and expenses, but focuses on treatments applied to individual fields.
For each field he looked at the costs and returns that would apply from conventional inputs and treatments, and compared that to the differences in inputs and treatments and yields related to VRT.
Under variable rate or precision farming technology, a number of tools including soil analysis, yield monitor information, vegetative analysis using infrared technology, and the farmer’s field knowledge is used to determine the yield potential or productivity of a different sites in a field. A knoll may have the lowest yield potential, for example, where as a lower lying area may have the highest.
These varied sites on a field are defined, identified as zones, and those zones are entered into a computer program along with a fertilizer prescription for each zone. The idea isn’t necessarily to apply more fertilizer in an attempt to bring every zone up to a maximum yield potential, but to tailor fertilizer rates to the production capability of each zone.
Under a conventional system, where a farmer might apply 150 pounds of a fertilizer blend to every acre, using variable rate technology, the computer program directs the rate controller on the fertilizer equipment to apply the fertilizer prescription tailored for each zone in the field. The least productive sites, the knolls, for example, might receive less fertilizer, and sites with higher yield potential, might receive more.
The theory is good, but as Darling noted it doesn’t always pan out for every zone on every field. His economic analysis showed some zones received more fertilizer, but actually had lower yield than some conventionally-treated zones. Ultimately, in this project, two fields actually lost money under VRT, while the third had a dramatic increase in returns, which more than made up for any negative returns.
“This isn’t a conclusive evaluation of the economics of VRT,” says Darling. “But perhaps it is just the beginning of a process of where we can get a handle on the economics of this technology.”
Darling’s study was funded as part of the Agricultural and Research Extension Council of Alberta (ARECA). He hopes to continue the economic analysis of VRT in 2010.
Lee Hart is a field editor for Grainews in Calgary, Contact him at 403-592-1964 or by email at [email protected]