Grains Research and Development

Date: 01.01.2006

Better returns and lower risk

A national survey conducted as part of the nutrient management initiative produced some key messages on what growers expect, reports Wayne Pluske

A national nutrient management survey has reinforced that graingrowers want to improve returns and reduce risks when using fertilisers. While this in itself is nothing new, the survey results indicate the best way to improve fertiliser use on the ground is to include dollars and cents in the information and advice provided to growers.

Growers believe they are currently making good fertiliser decisions, despite having little objective or financial help to assess this. They want to improve fertiliser use but are frustrated by lack of information and advice on the likely returns from their investments.

Many think such information does not or cannot exist because profitability of fertiliser use is totally dependent on the type of season.

Yet unpredictability of seasons should not mean fertilisers are unmanageable. Quantitative information and prediction on likely returns in different types of seasons is likely to improve nutrient management. The re is a huge demand by growers for more knowledge and advisory help in nutrient management. This knowledge and advice must focus not only on technical aspects, but also on likely returns and risks of fertiliser use.

The se are the key messages from growers" responses to the nutrient management survey conducted in late 2004 and early 2005 as part of the GRDC Nutrient Management Initiative (NMI).

The survey was the start of the NMI project "Adoption of improved nutrient Management Practices", being undertaken by nutrient Management Systems, a national and independent specialist company in soil health and plant nutrition.

The GRDC and others are concerned that, despite considerable effort and research funding, the overall situation of nutrient management within the grains industry is far from optimal.

Fertiliser inputs are a major cost and impact on growers" operating surpluses, so better returns from improved nutrient management represents a major opportunity for improved long-term economic and environmental viability.

A substantial amount of research results, decision tools and advisory information about nutrient management is not reaching growers.

Even if it does, it may be in the wrong form or not relevant enough to influence a grower"s decisions and practices. The aim of this project is to improve the adoption of valuable information and methods for nutrient management.

The aim of the survey was to provide a "snapshot" of nutrient management practices, constraints and solutions in the grains industry. Nutrient Management Systems coordinated the survey, which was followed by phone surveys and 15 grower workshops held across Australia to expand on its key findings.

The survey was compiled with assistance from the School of Agricultural and resource economics at the university of Western Australia.

It was distributed and advertised through grower groups, independent consultants, agribusinesses, government departments of agriculture and rural media and publications, including Ground Cover. The survey could be completed in hard copy or online.

This article discusses a small portion of the results, using information from the phone surveys and grower workshops to help with explanation of results. A full report on the survey and other aspects of the study is on the GRDC website.

Of the 1214 growers who responded to the survey, 8% were from the GRDC"s northern region, 65% southern, 25% western and about 3% unknown.

Most (96%) respondents grew wheat, with barley (83%), oats (53%), canola (68%) and pasture (50%) also widely grown.

Fertilisers accounted for more than 15% of total variable costs for 88% of respondents. For 41% of respondents, fertilisers were 30% or more of total variable costs.

Soil nutrient management was rated important for farm management by 89% of respondents (table 1). This was the same as weed control/herbicide resistance and considerably higher than the likes of plant variety selection (72%) and tillage method (66%). Maximising profit was rated as important by the greatest percentage of respondents (92%).

Small percentages of respondents rated avoidance of manufactured fertilisers (11%) or using as little fertiliser as possible (21%) as indicators of efficient nutrient management (table 2). Most (69-85%) rated good financial and agronomic use of nutrients as efficient nutrient management. This, combined with 96% of respondents indicating they are reliant upon manufactured fertilisers (Table 3), suggests improved use of a necessary input is the key issue.

Likely financial return, risk, information exchange and determining nutrient requirements are the main concerns respondents have with how their nutrient decisions are made (Table 4). eighteen per cent of respondents were most concerned about the cost-price squeeze from high fertiliser prices and/or low grain prices.

Similarly, another 16% of respondents were most concerned about their return on their fertiliser investment. Eighteen per cent were most concerned about uncertainty in weather/rainfall and its impact on determining nutrient rates and profits.

Thirty-six per cent of respondents were most concerned about some aspect of current information and knowledge or advice, decision tools and methods used to determine fertiliser requirements. Only a small percentage of respondents were most concerned about technical aspects of soils and fertilisers. This is surprising given a historical perception that growers want more or better technical information to improve nutrient management.

The economic focus of growers clearly evident may reflect awareness that yields and profits from fertilisers are not as closely aligned as they have been in the past. It may also reflect growers" willingness in the past to accept information and advice with limited financial emphasis, which in turn may have further encouraged extension of mainly technical information.

Growers recognise they are reliant on fertilisers for crop production (Table 3) but are somewhat unsure of just how much to apply. Many believe the type of season dictates the return from fertiliser, so there is little that nutrient management can do to influence returns and manage risk. As a consequence, a common risk strategy is to fertilise for an average season, forgoing profit in better seasons and minimising over-expenditure in poorer seasons.

The majority of growers, however, realise there are costs if too little or too much fertiliser is used but are unsure of appropriate rates between the two extremes. So there are large margins for error and inefficiency in fertiliser use.

Limited financial quantification of the consequences of altering rates, especially in unpredictable seasonal and financial environments, stifles effective nutrient management. Unpredictability is not synonymous with unmanageable fertiliser use, but management is difficult without quantification of likely financial impacts of altering fertiliser use.

Seeing is believing when It comes to nutrient management. Respondents rated personal experiences and local trial results as the most important sources of information for improving fertiliser decisions (Table 5).

Soil and plant tissue tests are rated highly, mainly because the results are very relevant to the individual grower"s location and are usually interpreted by or with the assistance of a local adviser. Farm consultants were rated the most important advisory source. They are considered as providers of independent advice, separate to product sales. However, other sources of independent advice, such as government agencies and to a lesser extent researchers, did not rate as high.

While growers stated they would like to use independent consultants, many cannot access suitable consultants and/or are not prepared to pay for a consultant"s advice.

Agribusiness advisers are a significant source of advice and a major conduit for nutrient management information. Many individual agribusiness advisers are highly regarded, especially if they are technically sound, have been in a region for a considerable time, have a suitable demeanor and their sales focus does not overshadow their advice.

Less than 20% of respondents rated computer programs and the Internet as important sources of information for improving fertiliser decisions. Only 16% of respondents use computer programs to assist with fertiliser decisions and most of the programs are used in conjunction with an adviser through commercial services like Nutrient Advantage and NU logic.

Other programs used are least-cost fertiliser or whole-farm planning tools (such as Back Paddock Software and Paddock Action Manager) rather than software specifically designed to improve nutrient management.

Soil and plant tissue tests are highly regarded and widely used by respondents (Table 6) given that sampling each paddock every three to five years is generally regarded as sound practice. However, the majority of respondents (59%) thought they were taking insufficient soil tests. Even more (76%) thought they were not taking sufficient plant tissue tests. Of those who thought they took insufficient tests, most (72% for soil and 57% for plant tissue) indicated cheaper tests would encourage them to take more (Table 7).

More time would encourage more plant tissue testing than soil testing. While the survey did not differentiate between better laboratory analysis of tests and interpretation of analysis results, It revealed "better results" would encourage many growers to do more testing.

Financial risks, through low grain yield or price, were rated as constraints to how fertilisers are used by the largest percentage of respondents (Table 8). This again highlights growers" concerns about economic consequences of fertiliser use in unpredictable environments.

After risks, and with the exception of equipment constraints, respondents then rated information, advice and knowledge issues as the next major constraint to how fertilisers are used. This again emphasises that growers want more nutrient management information, but not as much as they want economic returns at low risk as a consequence of their decisions.

Better knowledge, better matching of fertiliser requirements and soil and plant tissue testing were the main ways growers thought nutrient management could be improved (Table 9). Many of these responses involved application of variable rates of fertilisers with rates better determined from existing or new information and/or soil and plant tissue testing.

Feedback from the grower workshops was that variable-rate application of fertilisers is currently limited by lack of advice and proof that the benefits of altering rates outweighs the inconvenience and, to a lesser extent, the costs. Growers would be more prepared to alter fertilisers and rates if their advisers could tell them how much more profit is likely to be made.

the results of This survey have helped shift the focus of This NMI project towards return and risk on fertiliser investments. The aim is to have some pilot groups in which growers identify their key profit drivers associated with nutrient management and fertilisers.

Once identified, It can be determined if these profit drivers can be and/or are worth addressing. In implementing and examining changes for financial benefits, growers will also benefit from a greater understanding of nutrient management. Advisers also need to have better understanding of financial implications of nutrient management, so some will be involved In the pilot groups. In addition, regional guidelines will be developed for advisers, so the potential they offer for improving nutrient management can be realised.

Wayne Pluske is a director of Nutrient Management Systems.

For more information: Wayne pluske, 08 9315 2488, 0418 726 121, nutrientmswa@optusnet.com.au