Are We Underestimating Risk Management Potential With Precision Ag?
Updated: May 26, 2020
“How will I make more money with SWAT MAPS?” is a question I fully expect to be asked every time I speak with a new client. In fact, I hope that I answer that question before they even ask it since improving profitability is the whole point.
Profitability comes from improving ROI of inputs – in the case of variable rate this is often applied nutrients. But as stated in my previous blog post, the return is one thing, the chance of getting that return is another. Most people would love to get a 4:1 ROI on any input, but if the chance of getting that is only 10% would you do it?
This is the problem in wetter climates like we’ve been experiencing in NW Alberta. The dry spring of 2019 allowed many fields to be seeded corner to corner, but in June Mother Nature changed her mind and decided to get to average seasonal rainfall after all; and now many areas have drowned out depressions resulting in a lot of lost inputs.
So what if we put some dollars to this? There are certain inputs you can’t do without – seed and herbicide come to mind. In these weedy depressions there’s no chance of anything without them. In other words if you don’t invest anything in them you’ll never make anything. But these very fertile, non-saline depressions can have a good yield potential with very few nutrients needed. A SWAT MAP will delineate these areas as a zone 10, with a transition zone 9 that is also very saturated in a wet year.
Let’s consider an actual SWAT mapped field in northern AB of 150 acres. About 10% of it ends up in zones 9 and 10, or 16 acres total. Assuming a blend of 90-39-19-0 applied flat rate to wheat, that is $68/ac invested into nutrients, $45 of which is nitrogen, $23 being P & K. The P & K isn’t really susceptible to loss as it will stay in the soil but $45 worth of N certainly is, especially if there is water ponding for several days mid-summer. Much of the N is lost as nitrous oxide, which has an environmental cost but that’s another story.
By using VR we can often cut back the rate of fertilizer in these depressions, not just due to risk but because these areas often have a lot of nutrients in the soil and high mineralization rates if they don’t completely flood. Suppose we reduce the fertilizer rates in just zones 9 & 10 – reducing the overall spend by $606 in 16 acres compared to flat rate, of which $424 is N which would have been lost to the environment. This equates to savings of over $4.00 per acre across the whole field.
But where the real value comes in is shown in the following example – where the “savings” in poor ROI areas are reallocated to areas that can likely benefit from more nutrients, or high ROI areas. With this example, being in a higher rainfall area, nutrients are reallocated to SWAT zones that don’t have the same mineralization potential or soil nutrient levels, increasing the yield and/or protein potential in these zones. It’s like moving money from a high risk fund that averages 5% to a lower risk fund that averages 10% per annum – same amount invested, but different risk and return potential.
So what’s the profit potential of VR fertilizer? Frankly it’s impossible to say and varies greatly from field to field and farm to farm. But by utilizing an accurate SWAT MAP that considers both soil & water potential, we can limit risk exposure and improve the ROI of applied nutrients.
Wes Anderson, PAg
Senior Fertility Specialist