What It Costs To Protect Your Nitrogen

Nitrogen fertilizer costs have risen sharply in the past year. Urea is almost 300% more expensive now than the same time one year ago. Reasons for this price increase include increased natural gas prices, increased transportation costs, and supply/demand issues. Many growers are asking if they can afford to protect their N during times of high N prices. The answer to this question is “YES!”. With the higher costs of N, it becomes even more important to protect this investment. Any N lost at a higher price will ultimately cost the grower more in the end.

Growers have a variety of options to protect N against loss. Inhibitors and stabilizers will protect N for a given time, but a recent post in Green Markets indicates the cost of these products increased 10-15% recently. Another option for protecting N is ESN. ESN is a controlled-released N fertilizer that releases N over time. It provides the longest protection of any agriculture product on the market. As illustrated in the chart below, the cost of protecting N with ESN is unchanged relative to the cost of urea. This means growers are protecting a higher-value commodity for the same cost they have always paid. When comparing the calculated return for 2020 and 2021, the expected return for ESN blended nitrogen sources is higher because the commodity prices in 2021 are so much higher than 2020, and the price difference between urea and ESN in 2020 is similar in 2021 (Figure 1).

Figure 1. As the cost of urea increases, so does the cost of ESN. However, the cost to protect your nitrogen investment remains the same. As the cost of nitrogen increases, the value in protecting it increases.

Using the prices experienced in 2020, blending ESN at a 50/50 split or 30/70 split (urea/ESN) would result in an average increase in return of $11.50/ acre and $23.41/acre, respectively. Changing the prices to reflect late 2021 economics, blending ESN at a 50/50 split or 30/70 split would result in an average increase in return of $21.42/acre and $40.49/acre, respectively (Figure 2).

Figure 2. Return in dollars per acre for 100% urea, 50/50 urea/ESN, and 30/70 urea/ESN applied at 180 pounds of nitrogen per acre. Corn price in 2020 – $3.65, corn price in 2021 – $5.25. Urea price in 2020 – $350/ton, urea price in 2021 – $840. ESN price in 2020 – $490/ton, ESN price in 2021 – $980/ton. Assuming a based yield of 200 bu/acre. Prices presented are for illustration purposes only. Actual retail price will vary from retailer to retailer and in different geographies.

When considering that the price difference between urea and ESN is relatively constant regardless of the price of urea, the actual price paid to protect urea from nitrogen loss gets cheaper as the price of urea goes up (Figure 3). Assuming a price difference of $140/ton and a urea price of $500/ ton, the cost to protect urea is 27.8% of the total. Assuming the same price difference and a urea cost of $900/ton, the cost to protect urea is 15.4% of the total. There is more financial incentive to protect your nitrogen investment with today’s economic realities.

Figure 3. The cost of protecting urea gets cheaper as the price of urea goes up. Amounts assume $140/ton price difference between urea and ESN. Prices presented are for illustration purposes only. Actual retail price will vary from retailer to retailer and in different geographies.

esn_logoekonomics_logocan17rainbow_logosmart_nutrition_rev