2. Why is Nitrogen High? How Long Will it Last? Other Nitrogen Fertilization Issues. Gordon Johnson Soil Nutrient Management Specialist Plant & Soil Sciences Oklahoma State University Gordon Johnson Soil Nutrient Management Specialist Plant & Soil Sciences Oklahoma State University

3. OSU Soil Fertility 03 01 Why is Nitrogen Fertilizer so High Priced? N 2 + CH 4 + H 2 O Nitrogen (atm) + Natural gas + Natural gas Nitrogen (atm) + Natural gas + Natural gasHeatHeatPressurePressure AnhydrousAmmoniaAnhydrousAmmonia 2NH 3 + CO

4. OSU Soil Fertility 03 01 Why is Nitrogen Fertilizer so High Priced? Nitrogen (atm) + Natural gas Nitrogen (atm) + Natural gas AnhydrousAmmoniaAnhydrousAmmonia Approx 32 mcf Natural gas Approx 32 mcf Natural gas 1 ton of Ammonia Ammonia

5. OSU Soil Fertility 03 01 Why is Nitrogen Fertilizer so High Priced? +Nitricacid+Nitricacid AnhydrousAmmoniaAnhydrousAmmonia + CO 2 UreaUrea Ammonium Nitrate +SulfuricAcid+SulfuricAcid Ammonium Sulfate

6. OSU Soil Fertility 03 01

7. U.S. Natural Gas and Ammonia Price Trends Gas prices from US DOE Website: http://www.eia.doe.gov/ NH3 prices from: http://www.tfi.org/Statistics/pricespaidbyfarmers/

8. OSU Soil Fertility 03 01 U.S. Ammonia Prices NOLA Midwest July 1999 - January 2001 Tampa Source: Agrialiance, 03 01

9. OSU Soil Fertility 03 01 Recent Oklahoma Natural Gas and Estimated Ammonia Price Trends

10. OSU Soil Fertility 03 01 How Long Will it Last? Look at “futures” for natural gas on NYSE. – Prices are likely higher than what industry will have to pay. Only 3 % of total consumption is for fertilizer. Price is driven by demand for residential heating and electric generation. Look at “futures” for natural gas on NYSE. – Prices are likely higher than what industry will have to pay. Only 3 % of total consumption is for fertilizer. Price is driven by demand for residential heating and electric generation.

11. OSU Soil Fertility 03 01 New York Stock Exchange Natural Gas Futures

12. OSU Soil Fertility 03 01 Opportunities for Nitrogen Fertilizer Response are Common.

13. OSU Soil Fertility 03 01 Bermudagrass: Yield Response to Nitrogen (AN)

14. OSU Soil Fertility 03 01 Bermudagrass: Crude Protein Response to Nitrogen (AN)

15. OSU Soil Fertility 03 01 Bermudagrass: Crude Protein Response to Nitrogen (AN)

16. OSU Soil Fertility 03 01 Can you still afford to fertilizer bermudagrass at high nitrogen costs?  When ammonium nitrate (34-0-0) costs $240/ton.  $240/680 = $0.35/lb N  When urea (46-0-0) costs $250/ton.  $250/920 = $0.27/lb N  For a cost of $250, you get  920 lb N from urea  715 lb N from ammonium nitrate (22% less N)  When ammonium nitrate (34-0-0) costs $240/ton.  $240/680 = $0.35/lb N  When urea (46-0-0) costs $250/ton.  $250/920 = $0.27/lb N  For a cost of $250, you get  920 lb N from urea  715 lb N from ammonium nitrate (22% less N)

17. OSU Soil Fertility 03 01 Can you still afford to fertilizer bermudagrass at high nitrogen costs?  600 lb/acre N rate produced:  Forage ranging from 15 to 22 % crude protein.  Average of 17 % crude protein costing an average of $0.12/lb of CP.  Protein supplement (F.O.B. Stillwater, 3/29/01):  20 % cubes @ $144/ton  $0.27/lb of CP  600 lb/acre N rate produced:  Forage ranging from 15 to 22 % crude protein.  Average of 17 % crude protein costing an average of $0.12/lb of CP.  Protein supplement (F.O.B. Stillwater, 3/29/01):  20 % cubes @ $144/ton  $0.27/lb of CP

18. OSU Soil Fertility 03 01 Can you still afford to fertilizer bermudagrass at high nitrogen costs?  600 lb/acre N rate produced:  First cutting (May 26):  2.4 ton/acre.  21.5 % CP. (1030 lb CP).  Production costs:  $25/ton harvest.  $0.35/lb N from ammonium nitrate.  $3/acre spreading.  “Grow your own” protein supplement cost $.09/lb of CP.  Protein supplement (F.O.B. Stillwater, 3/29/01):  20 % cubes @ $144/ton (bulk)  $0.27/lb of CP  600 lb/acre N rate produced:  First cutting (May 26):  2.4 ton/acre.  21.5 % CP. (1030 lb CP).  Production costs:  $25/ton harvest.  $0.35/lb N from ammonium nitrate.  $3/acre spreading.  “Grow your own” protein supplement cost $.09/lb of CP.  Protein supplement (F.O.B. Stillwater, 3/29/01):  20 % cubes @ $144/ton (bulk)  $0.27/lb of CP