Private Management Practices and Public Policies Affecting Agricultural Nitrogen Use: An Overview Roger Claassen and Stan Daberkow Economic Research Service, USDA April 9, 2008 EPA’s Integrated Nitrogen Committee meeting The views expressed are the authors’ and may not reflect those of USDA or ERS
Presentation Outline � Commercial nitrogen use in agriculture � Trends in selected nutrient management practices in corn production � Policy effects on land use and crop mix—Energy, commodity, crop insurance, conservation � Factors affecting nutrient management practice adoption—participation in conservation programs/cost-sharing incentives � Questions & answers
U.S. commercial nitrogen fertilizer use, 1995- 2006 13,500 Tons (000) 13,000 12,500 12,000 11,500 11,000 10,500 5 7 9 1 3 5 9 9 9 0 0 0 9 9 9 0 0 0 1 1 1 2 2 2 Source: Commercial Fertilizers, 2006
Nitrogen use by major field crops and other crops, 1995-2006 6,000 5,000 T o n s (0 0 0 ) Corn 4,000 Cotton 3,000 2,000 Soybeans 1,000 Wheat 0 Other 5 7 9 1 3 5 9 9 9 0 0 0 9 9 9 0 0 0 1 1 1 2 2 2 Source: U.S. Fertilizer Use and Prices, ERS
Adoption Levels of Selected Corn Nitrogen Management Practices � Application rates � Soil testing � Crop rotation � Manure and nitrogen inhibitor use � Nitrogen broadcasted with and without soil incorporation � Yield monitors and yield mapping � Application timing, information sources, and yield goals
Corn yields and nitrogen application rates, 2006-2007 165 160 Nitrogen 155 Bu. or Lbs. per acre applied (lbs/acre) 150 145 140 135 130 Corn yield (bu/acre) 125 120 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: National Agricultural Statistics Service
Share of planted corn acreage using a soil test or nitrogen soil test 60 50 40 P e r c e n t Soil test 30 Nitrogen soil test 20 10 0 1996 1997 1998 1999 2000 2001 2005 Source: http://www.ers.usda.gov/Data/ARMS/CropOverview.htm
March corn price, April nitrogen price, and nitrogen/corn price ratio, 1995-2007 0.7 Prices or price ratio 0.6 0.5 0.4 0.3 0.2 0.1 0 5 6 7 8 9 0 1 2 3 4 5 6 7 9 9 9 9 9 0 0 0 0 0 0 0 0 9 9 9 9 9 0 0 0 0 0 0 0 0 1 1 1 1 1 2 2 2 2 2 2 2 2 Nitrogen Cents/lb. Corn Cents/lb.*10 N/corn price ratio Source: National Agricultural Statistics Service
Major crop rotations on land planted to corn in the ten primary corn states, selected years, 1988-2005 P e rc e n t o f p la n te d a c re s 80 Previous crop corn 60 CCC rotation 40 CSBC rotation 20 Other rotations 0 1988 1989 1990 1995 1996 1997 1998 1999 2000 2001 2005 Source: Economic Research Service
Share of planted corn acreage on which manure was applied or nitrogen inhibitor used 20 15 P e r c e n t Manure applied 10 Nitrogen Inhibitor 5 0 1996 1997 1998 1999 2000 2001 2005 Source: http://www.ers.usda.gov/Data/ARMS/CropOverview.htm
Share of corn acreage on which all nitrogen applied was broadcast and share with and without soil incorporation 40 All nitrogen P e rc e n t 30 broadcast 20 No soil 10 incorporation 0 Soil incorporation 1996 1997 1998 1999 2000 2001 2005 Source; http://www.ers.usda.gov/Data/ARMS/CropOverview.htm
Share of planted corn acreage on which a yield monitor was used or a yield map produced 50 40 P e r c e n t 30 Yield monitor 20 Yield map 10 0 1997 1998 1999 2000 2001 2005 Source: Economic Research Service
Nitrogen timing, information sources, and yield goals by share of planted corn acres, 2005 Nitrogen application timing 16 All applied before planting--fall 34 All applied before planting-spring 9 All applied after planting 36 Split applications Source of information about nitrogen application rates 20 Crop consultant 37 Fertilizer dealer 6 Extension service 22 Yield goal 20% > actual yield Source: Western Economic Forum, forthcoming 2008
Practice adoption varies across practices and crops, 2001-03
Practice adoption reflects farm and operator characteristics
Practice adoption reflects farm and operator characteristics Farm Unit Standard Decision Management No listed characteristics practices aids intensive practice practices Average farm Acres 575 648 854 386 size Avg. commodity $ 17,409 24,587 34,833 4,561 Payment Irrigated land % 4 10 15 3 Average corn Bu/ 119 135 142 60 yield Acre Farming % 69 81 84 74 occupation Completed % 13 14 20 8 college Sought outside % 7 12 28 2 advice Source: Lambert, Dayton, Patrick Sullivan, Roger Claassen, and Linda Foreman. Conservation Compatible Practices and Programs: Who Participates? USDA-ERS
Energy markets and policy are driving forces in commodity markets � Oil prices; ethanol mandates; tax subsidies � Ripple effects in commodity markets, input costs ’04-’06 May Futures 3/26/08 Average Corn ($/bu) 2.36 5.52 Soybeans ($/bu) 5.94 13.52 Wheat ($/bu) 3.69 10.69 Cotton (cents/lbs) 45.30 71.02 Sources: National Agricultural Statistics Service, USDA, Chicago Board of Trade, and Kansas City Board of Trade
Commodity programs protect some producers against low prices Crop Unit Loan Rate Target Price May Futures 3/26/08 Corn Bu. 1.95 2.63 5.52 Soybean Bu. 5.00 5.80 13.52 Wheat Bu. 2.75 3.92 10.69 Cotton Lbs. 52.00 74.40 71.02 Sources: Farm Service Agency, Chicago Board of Trade, Kansas City Board of Trade, Agricultural Marketing Service, USDA
Insurance and disaster programs protect producers against production or revenue loss � Research suggests crop insurance has small land use effect (2-3 million acres) � Subsidy increases beginning in 2000 could mean the effect is now larger � Ad hoc annual disaster assistance could be adding to that effect
USDA environmental programs retire land and encourage nutrient management � CRP: 34.7 million acres retired � Fields and whole farms � High priority practices (mostly buffers, such as grass waterways, filter strips, etc.) � CREP targets specific environmental issues � EQIP: assists with nutrient management and other conservation practices
Long Term Trends in Federal Figure 1. Trends in USDA Conservation Expenditures, 1983-2005 Conservation Spending 5.0 4.5 Agricultural Land Preservation 4.0 Working Land Programs 3.5 Land Retirement Programs billion dollars 3.0 Conservation Technical Assistance 2.5 2.0 1.5 1.0 0.5 0.0 1983 1987 1991 1995 1999 2003 Source: ERS analysis of Data from Office of Budget and Policy Analysis, USDA
EQIP focuses heavily on livestock and manure nutrients Source: NRCS, 2003
Participation reflects farm and operator characteristics Farm Unit EQIP/CRP Land Retirement Non- Characteristics Working Partic. Land Partial Farms Whole Farms Average Farm Acres 1,089 1,127 267 374 Size Average $ 26,571 12,698 634 4,430 Commodity Payment Farming % 85 62 5 40 Occupation Average Ratio % 57 99 141 93 Owned/Operated Source: Lambert, Dayton, Patrick Sullivan, Roger Claassen, and Linda Foreman. Conservation Compatible Practices and Programs: Who Participates? USDA-ERS
For more information: Amber Waves (July 2006) – Agriculture and the Environment www.ers.usda.gov/ AmberWaves/ july06specialissue Lambert, D., P. Sullivan, R. Claassen, and L. Foreman, Conservation- Compatible Practices and Programs: Who Participates? Economic Research Report No. 14 (ERR14), Economic Research Service, USDA, (February 2006), 43 pp. www.ers.usda.gov/publications/err14 Wiebe, K, and N. Gollehon, Agricultural Resources and Environmental Indicators, 2006 Edition, Economic Information Bulletin No. 16 (EIB5), Economic Research Service, USDA, (July 2006), 79 pp. www.ers.usda.gov/ publications/ arei Customized Data Summaries from ARMS: http://www.ers.usda.gov/Data/ARMS/CropOverview.htm
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