Guideline Index

# Chapter 14: Calculating Rates and Costs

The next step is to work out the cost of the fertiliser per hectare and the cost of individual nutrients per hectare for various fertiliser products. The most accurate costing will include all costs and discounts. For example:

 Product cost ex factory plus Bin hire plus Cost of delivery plus Costs of spreading minus Discounts for early purchase, prompt payment, etc.

When the ‘as-spread’ cost is considered, high-analysis fertilisers are often cheaper per hectare than are low-analysis fertilisers because of the smaller amount of fertiliser product to be transported and spread to achieve the same nutrient application rate.

#### 14.3.1 The cost of fertiliser per hectare

When calculating the following fertiliser and nutrient costs, refer to the following table of generic bulk fertiliser costs which are ex-factory and excluding GST as of March 2013.

Fertiliser cost per hectare is calculated using the following formula:

Example. What is the total cost per hectare to apply 25 kg P/ha using single superphosphate?

In Section 14.2.1 , we worked out that you need a fertiliser application rate of 281 kg of generic single superphosphate (8.9% P) per hectare to apply 25 kg P/ha. The total cost per hectare can then be calculated using the formula:

If you assume a freight and spreading cost of \$40/tonne and a bulk cost of \$364/tonne (ex. Newcastle – see Table 14.1), then the total cost is \$404/tonne, or \$113.52/ha.

Example. What is the total cost per hectare to apply 25 kg P/ha using generic triple superphosphate?

Using generic triple superphosphate (20% P), you need a fertiliser application rate of 125 kg/ha to apply 25 kg P/ha (see Section 14.2.1 ). If you assume a freight and spreading cost of \$40/tonne and a bulk cost of \$801/tonne (ex. Newcastle – see Table 14.1), then the total cost is \$841/tonne, or \$105.13/ha.

Note: Freight and spreading costs vary with both application rates and location.

#### 14.3.2 Which product would you choose?

The obvious choice on the basis of the phosphorus cost per hectare would be triple superphosphate, but there are other factors that need to be considered. For example, are nutrients other than phosphorus needed? For instance, this generic triple superphosphate contains only 1% sulphur, whereas single superphosphate contains 11% sulphur. If your soil test result showed a sulphur deficiency, then you might choose single superphosphate or other products containing sulphur.

Comparing fertiliser products can be very difficult because of their different nutrient analyses. You should never compare only the price per tonne of fertiliser products. You should always take into account the nutrient analysis and then compare the cost per kilogram of the actual nutrients – See Section 14.3.3 .

There is usually not a great difference in price for similar products between the fertiliser companies. The biggest savings that can be made are by identifying what product you need. In other words, what nutrients are actually required as determined by careful soil testing or plant tissue testing and nutrient planning (see Chapter 15 ). The choice of product or company may depend on the reliability of supply and also financial incentives that may be offered for buying early.

#### 14.3.3 The cost of a nutrient in a fertiliser product

The cost of a nutrient in a product can be calculated using the formula:

##### 14.3.3.1 Bulk cost per kg of N in urea

Urea is 46% nitrogen. Thus, 1 tonne of urea contains 460 kg of nitrogen. Using the formula and assuming the cost per tonne of urea is \$628 we can calculate the cost of 1 kg of nitrogen in urea.

##### 14.3.3.2 Bulk cost per kg of P in a generic triple superphosphate

A generic triple superphosphate has 20% phosphorus. Thus, 1 tonne contains 200 kg of phosphorus. Using the formula and assuming the cost per tonne is \$756 we can calculate the cost of 1 kg of phosphorus in this product.

##### 14.3.3.3 Bulk cost per kg of K in muriate of potash

Muriate of potash (MOP) is 50% potassium. Thus, 1 tonne of MOP contains 500 kg of potassium. Using the formula and assuming the cost per tonne of MOP is \$658 we can calculate the cost of 1 kg of potassium in MOP.

##### 14.3.3.4 Bulk cost per kg of S in gypsum

Gypsum products contain varying amounts of sulphur. For this example, we have chosen a gypsum source containing 17% sulphur. Thus, 1 tonne of this gypsum contains 170 kg of sulphur. Using the formula and assuming the cost per tonne of gypsum is \$140, we can calculate the cost of 1 kg of sulphur in this gypsum.

##### 14.3.3.5 Bulk cost per kg of P in MAP

Mono ammonium phosphate (MAP) has an NPKS analysis (see Chapter 11.4.1 ) of 10 : 21.9 : 0 : 1.5, so contains both nitrogen, phosphorus and a small amount of sulphur. In order to work out the cost of a kg of P in MAP, realistically the value of the nitrogen component should also be taken into account. The first formula will calculate the cost of 1 kg of P without considering the 10 % nitrogen component, assuming the cost per tonne of MAP is \$704.

If however, both nitrogen and phosphorous are needed, and the value of the nitrogen in the MAP were considered, the calculations would give a very different figure for 1 kg of P. In 1 tonne (1,000 kg) of MAP there is 10% or 100 kg of nitrogen. Assuming that 1 kg of N is \$1.37 (as calculated from urea – see Section 14.3.3.1 ) then there is 100 kg x \$1.37/kg N = \$137 worth of nitrogen in 1 tonne of MAP. This value is then deducted from the total cost/tonne of MAP:

Following these steps will allow a cost comparison to be made of phosphorus on a \$/kg basis from a range of different phosphorus containing fertilisers.

##### 14.3.3.6 Bulk cost per kg of N in Manure

Table 14.2 shows the averages and ranges of the major nutrients (N, P, and K) for a variety of animal manures.

Note: Moisture content must be taken into account when costing the nutrients provided in organic fertilisers and when calculating the rate of the spread nutrients.

Therefore, to calculate the kg of nitrogen in Cattle manure (based on the results from the above table) the amount of moisture (water) in a tonne of fresh manure must be deducted.

1 tonne (1,000 kg) contains 40% moisture; therefore the amount of dry matter left is simply:

1,000 kg – 40% (400 kg) = 600 kg dry weight

The average nitrogen proportion is 1.5%, therefore 600 x 1.5% = 9 kg N/tonne of manure. It is important to understand that nitrogen in manure is in many different forms with varying rates of plant availability. Hence not all of the N in manure will be available in the first year, and will require mineralisation over time before it is plant available.

Therefore, the value of total N in the manure can be estimated assuming that 1 tonne of manure will release 9 kg of nitrogen over a few years. Using the formula and assuming the cost per tonne of manure is \$15 we can calculate the cost of 1 kg of nitrogen in manure.

It is important to remember that only a portion of the N valued will be plant available in the first year. Refer to Making the Most of Animal By-Products – Fact sheet #3, for more information on how to calculate what manure is worth.

Exercise 14.3 provides practice in calculating the cost of nutrients.

#### Exercise 14.3

Using the cost of one nutrient in various fertiliser products to compare prices.

In this exercise, we assume that you are interested in the cost of phosphorus in the various fertiliser products.

The following formula allows you to calculate the cost of one nutrient in a fertiliser product. You can use the same formula for different fertiliser products or for a different nutrient, such as N, K, or S. Just follow the three steps given below.

Step 1. Using Table 14.1, write the bulk price ex-factory for the products listed in the table below in the boxes in column 1.

Step 2. Using the fertiliser product lists (Appendix G ), find the percentage of phosphorus for each product and write the amount of phosphorus per tonne in the boxes in column 2. Remember to use total P, not available P. (See Chapter 11.4.1 if you want to review how to calculate the amount of nutrient in 1 tonne of a fertiliser product.)

Step 3. Calculate the cost of 1 kg of phosphorus for each product, using the formula below, and fill in the boxes in column 3.

Note: When calculating the cost of nutrients for your farm, use the total cost (adding freight, spreading, etc. and deducting any discounts), not the ex-factory price.