Dairy N for Profit Project

Nitrogen fertiliser has become a seemingly indispensible input for many modern dairy farms. But how profitable are nitrogen fertiliser decisions?

A new national project ‘Dairy Nitrogen for Profit’, funded by the Geoffrey Gardiner Dairy Foundation and Department of Primary Industries Victoria, is about to improve the agronomic and economic basis for nitrogen fertiliser decisions on dairy pastures.

The project involves the ‘who’s who’ of scientists working in nitrogen fertiliser management on dairy farms from Victoria, Tasmania and Western Australia, and Australia’s leading dairy farm economist, as well as staff from major fertiliser and dairy companies.

According to Dr Cameron Gourley, Senior Research Scientist and Project Leader with the DPIV at Ellinbank, the issue is critical to dairy farm productivity. “Increased milk production on Australia dairy farms over the past 2 decades has been largely driven by increased use of nitrogen fertiliser and imported feeds”, he said. “With anticipated increases in fertiliser prices, better decisions about nitrogen inputs will be critical to the profitability and sustainability of dairy farm businesses.”

Australian dairy farmers are using between 4 and 10 times the amount of nitrogen fertiliser compared with what they did 20 years ago. This equates to approximately 180,000 tonne of nitrogen fertiliser annually; costing around $200m, and on average around $30,000 per farm each year.

While nitrogen fertiliser is a key driver of dairy farm productivity, inefficient use can results in diminished productivity, reduced profit and loss of excess nitrogen to the environment. In a recent national study on nutrient use on dairy farms, Dr Gourley and his team found that the efficiency of nitrogen use (defined as outputs in milk and animals as a proportion of inputs in feed and fertiliser) was on average less that 28%, and the overall loss of excess nitrogen to the environment was often greater than 225 kg of nitrogen per ha.

Such low efficiencies and high surpluses are recognised worldwide as leading to reduced economic performance, potentially adverse effects on cow performance, and excess nitrogen in the environment. Consequently, dairy farmers are increasingly being held scrutinised for the environmental performance of their operations and better managing nitrogen is a major priority.

“More sophisticated decisions on the use of nitrogen fertiliser inputs are required as our dairy farms have intensified” Dr Gourley said. “The Dairy Nitrogen for Greater Profit” project will develop improved tools for determining farm-specific production and profit responses to nitrogen fertiliser use and make these available through our partnership with industry.”

The proposed approach acknowledges that there is not a single pasture production response to a particular nitrogen application rate. The extra pasture growth from a nitrogen fertiliser application and associated profitability will be influenced by many factors such as soil temperature and moisture, rate and timing, pasture species present, climate conditions, existing soil nitrogen supply and management factors such as grazing pressure and feed supplementation.

“We will make use of existing and new experimental data to develop improved predictions of pasture responses to particular nitrogen fertiliser applications in various situations.” Dr Gourley said. “The established pasture production response functions for nitrogen fertiliser applications will then be analysed along with new information from experiments on commercial dairy farms.”

According to Professor Bill Malcolm, dairy farm economist and project team member “The unique aspect of this project is bringing economics, and profit (marginal return over marginal cost), to the fore; linked to improved predictions about pasture responses to N fertiliser applications. This is necessary for the continued competitiveness of Australian dairy farmers.”

“There is a need to move from generalized average and linear predictions of pasture production responses (e.g. 10 kg DM / kg N applied on average, or, 1 kg N/ha/day of grazing) to advice that is profit-based and tailored to the system/farm business” Professor Malcolm said. “This is particularly the case with nitrogen fertiliser where the benefits are determined by important interactions between parts of the farm system (e.g. feed production, stock policies and feed utilisation).”

So what will be the benefits? According to Dr Gourley, “Australian farmers and their advisors will be more confident to apply nitrogen fertiliser knowing that their own specific pasture and farm characteristics are considered in the recommendation and that the best available scientific information is being applied.” “Dairy farmers will be able to increase profitability without wasting nitrogen fertiliser.” “This will in turn result in improved nitrogen use efficiency, and a reduction in nitrogen losses from dairy farms to ground water, waterways and the atmosphere.”

The project has widespread support from the Geoffrey Gardiner Dairy Foundation, Department of Primary Industries Victoria, Department of Agriculture and Food WA, Tasmanian Institute of Agriculture, the Fertiliser Industry Federation of Australia, Incitec-Pivot Limited, Murray Goulburn Limited and Fonterra Limited.

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