Risk management for tactical nitrogen fertiliser applications in pastoral farming

Abstract

The physical and financial outcome from the tactical application of nitrogen fertiliser in pastoral farming is always uncertain. A management policy is therefore required to minimise uncertainty. Listing the sources of production, price and financial risk for nitrogen fertiliser inputs and identifying management actions that mitigate these creates awareness of risk and indicates where management effort can be focused. Data obtained from traditional pasture response research trials are not well suited to decision-making at the farm level. However, results obtained using an expert knowledge approach demonstrated that response relationships for nitrogen can be generated in a form which is more applicable to decision-making situations faced on farms. These data can be adapted to a decision tree framework which allows the likelihood of uncertain events to be formally incorporated in the estimation of financial returns for alternative application decisions for nitrogen fertiliser. A bull beef example showed that highest returns for different weather scenarios were consistently obtained for the application of 50 kgN/ha (as urea); rather than O or 25 kgN/ha. Keywords: economics, fertiliser, nitrogen, pastures, risk