High Nitrogen Prices Create Incentives for Farmers to Optimize Application Rates

Nitrogen fertilizer prices have surged to record highs in Illinois, making it more costly for farmers to apply rates above economically optimal levels. The average anhydrous ammonia price has reached $908 per ton, a level only seen once before in the past decade.

The Maximum Return to N Rate (MRTN) calculator, developed by the University of Illinois, recommends nitrogen application rates based on expected corn prices and fertilizer costs. Using this calculator with corn prices at $5.00 per bushel and anhydrous ammonia costs at $900 per ton, the MRTNs for 2027 were calculated as follows:

Northern Illinois: 184 pounds of actual nitrogen

Central Illinois: 181 pounds of actual nitrogen

Southern Illinois: 204 pounds of actual nitrogen

Average nitrogen application rates on farms enrolled in Precision Conservation Management (PCM) have varied little across years, and recent PCM data show that farmers are not adjusting their nitrogen rates in response to fertilizer price changes.

Research using PCM data indicates that applying more nitrogen than recommended can reduce returns more than usual, especially with current high fertilizer prices. The study found that farms with higher nitrogen application rates had lower profits compared to those following the MRTN recommendations.