P Placement: Economic Analysis Tool

P and K placement is a hot (and hopeful) topic. Many producers hope that they can save big money by going with placement.

What can placement actually do for you? Multiple studies in Missouri have failed to find that placement of P and/or K can increase yields. That leaves the possibility that placement will allow you to lower your rates. This is where the typical producer considering a placement machine is pinning his or her hopes.

Placement can improve the efficiency with which this year’s fertilizer is delivered to the crop. Remember that for producers who follow soil test recommendations, this year’s fertilizer is not actually necessary to attain full yield. Fertilization only serves to replenish the soil’s ability to supply all of the crop’s needs. This means that increasing the efficiency of this year’s fertilizer is a moot point.

The only way to take advantage of greater efficiency is to lower rates and allow soil test levels to drop. Then your repayment on the time and money that you spend on placement is the interest on the money that you saved on P and K. The kicker that many producers have overlooked is that you can’t put on a half-rate of P and K and let soil test drop forever. If you’re 100% efficient with delivering half of what the crop needs, where is the other half coming from? The soil. And the soil’s supply is being depleted. Eventually you will get to a point where you are cutting into your yields unless you go back to applying full removal rates of P and K with your placement machine. At that point, your savings have ended but your obligation to band P and K every year is permanent.

Ray Massey and Peter Scharf have developed an economic analysis tool for P and K placement (pdf capability and Flash Player required) based on the principles discussed above. The user can change the acres on which the placement machine is used, the cost of P, the cost of K, and P and K target levels for both broadcast and variable-rate management. The program will then calculate the 10-year Net Present Value (amount of money made/lost over 10 years including the interest cost of money spent).

A network of small-plot P and K response experiments all over Missouri showed zero yield response to P and K when soil test P was 30 lb P/acre or higher and soil test K was 200 lb/acre or higher, but small yield responses below those values. We suggest that soil test thresholds of 30 lb P/acre and 200 lb K/acre will produce full yields with broadcast management, and allow the flexibility to miss a year’s application without losing yield. (These values ignore spatial variability issues with soil nutrient supplies.) If the producer is committed to broadcasting P and K every year, this level can drop lower without losing yield, but we’re not sure how far. My guess is 20 lb P/acre and 150 lb K/acre would be safe. Getting value from P and K placement requires banding every year and allows the producer to let soil test values drop even farther.

Our economic analysis tool suggests that if the placement machine is purchased new and used on 2000 acres, you can let soil tests drop to zero and still not come out ahead with 2010 prices for P and K. Even with 2009's astronomical P and K prices, you have to let soil test values drop ridiculously low with banding to come out ahead.

Producers also often mention banding P and K as a solution for low-testing rental ground with unstable land tenure. They don’t want to invest in building the P and K levels of this land. This makes sense, but investing in a placement machine may not put them ahead. Our economic analysis tool suggests that on 500 acres of low-testing rental ground you can’t come out ahead by using placement.

back to top