Grains Research and Development

Date: 01.06.1999

How much nitrogen should I risk?

Graphics

SOI weather probability forecasts are most useful to growers if they are regionalised by local forecasters and agronomists and related to on-farm decision-making; below, agronomist Peter Hayman, NSW Agriculture at Tamworth, outlines a simple visual method of communicating climate probabilities related to on-farm risk and forward planning in northern NSW and southern Queensland.

The right amount of nitrogen for wheat is a balance between fertiliser supply and crop demand. This balancing act is made more difficult in northern NSW by erratic rainfall leading to uncertain crop demand.

Many farmers have used a simple budgeting approach to determine their fertiliser needs as shown in panel 1. The budget can be calculated for a range of season types as in panel 2. But, without including weather probabilities, it is impossible to know which of the three paths of the decision tree is best. There is an equal chance of a poor (red), average (yellow) or good (green) season.

The picture changes considerably with the introduction of weather probabilities for a good, average or poor season, as shown in panels 3 and 4.

Panels 3 and 4

We now have a tree with three decisions (to aim low, medium or high) and for each decision three possible outcomes (a poor, average or good season). In the example on panel 3, if you fertilise for a poor season and get a poor season you make $122. If you fertilise for a poor season and get a good season you still only make a $122, but you have missed the opportunity of fertilising for and getting a good season ($314).

The option of fertilising for a good season has the downside of getting a poor season and only making $55. The reward is higher, but so is the risk, even if the probability of this outcome is small.

Panel 4 shows the opposite scenario — the relative outcomes with high probability of a poor season.

Playing the odds

Although seasonal climate forecasts can't tell you what season type is going to occur, they will tell you the chance of each season type. A forecast for an increased chance of a good season suggests that the odds move in favour of fertilising for a good season.

After running this exercise with growers, and allowing them to put their own numbers into it, a common conclusion is that unless there is a veiy negative forecast, it is better to fertilise for an average or better season. This is because nitrogen pays much more in the good years than it will cost in the poor years.

Contact: Mr Peter Hayman 02 67 631256

Region North