Volume 14, Number 2
||This Month in Ag Connection|
(Author: Don Day, Natural Resource Engineer)
The Nitty Gritty on Nitrogen
Farmers can use their knowledge of nitrogen fertilizer characteristics, urease inhibitors and nitrification inhibitors to reduce the risk of nitrogen loss. High nitrogen fertilizer prices have farmers looking for a way to get more out of their fertilizer dollar. A brief primer on nitrogen fertilizer biochemistry may help you make nitrogen fertilizer decisions that increase nitrogen use efficiency.
During the growing season soil microbes rapidly convert ammonium to nitrate. This process can be delayed by cold temperatures, high or low pH and the addition of chemicals that delay the nitrification process.
A primary objective of good nitrogen management is to delay conversion of nitrogen to nitrate until the plant needs it as a way of minimizing potential losses of applied nitrogen.
The ammonia gas quickly reacts with the soil to form ammonium. This reaction temporarily raises soil pH in the anhydrous ammonia band. High pH and high ammonium concentrations in the anhydrous band initially slow the conversion of ammonium to nitrate.
Over time soil microbes move into the band and convert the ammonium to nitrate. This process can happen in a couple weeks in a warm soil and can be delayed months in a frozen soil.
The nitrification process lowers soil pH so the net effect of anhydrous ammonia is to lower soil pH.
Nitrification inhibitors such as N-serve® can be used with anhydrous ammonia to further delay conversion of ammonium to nitrate.
Urea and UAN (UAN is 50 Percent Urea):
This loss of ammonia can be prevented by incorporating urea into the soil. Urea is an uncharged molecule so can be carried into the soil with enough rainfall, typically 0.5 to 1 inch.
After urea converts to ammonium, microbes in the soil will convert the ammonium to nitrate. This process lowers soil pH so the net effect of urea is to lower soil pH.
There are two types of additives to delay conversion of urea to nitrate. Urease inhibitors such as Agrotain® will delay the conversion of urea to ammonium. Nitrification inhibitors will delay the conversion of ammonium to nitrate.
Agrium Inc. has a product, ESN, that delays nitrogen release from urea by encapsulating it in a polymer, slowing itsrelease to the soil.
Ammonium Sulfate and Ammonium Nitrate:
For more information on managing nitrogen efficiently see the following MU guides:
Taxation Tidbit: Commuting To and From the Farm
Many farmers live in homes off the farm. The cost of traveling between the home and the main or regular place of work is considered a nondeductible personal commuting expense. This is true regardless of the distance or the fact you might be driving the farm pickup and hauling tools. Additionally, if you live off the farm – starting your work days at the local café’s “morning farm management coffee seminar” will not convert the balance of the trip to the farm as deductible travel.
The best method of eliminating nondeductible commuting is to establish a business office in your home. The business office becomes your principal place of business and therefore you can deduct your daily transportation costs between your home office and other work locations.
You can qualify a room in your home as a farm business office if it is used exclusively and regularly as the principal place of business. Code Section 280A provides that a home office qualifies as the principal place of business if:
If you are in the business of farming – you need a business office. The home office will help make you a more efficient and effective business manager – plus it will be a great tool in defending the deductibility of travel costs between your home and the farm. Work with your tax consultant to insure all the i’s are dotted and the t’s are crossed in meeting the deductible requirements of your home business office.
(Author: Parman Green, Ag Business Specialist)
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Crop Insurance Today vs. Yesterday
Crop Insurance Today vs. Yesterday
Yield based insurance coverage includes Actual Production History Multiple Peril (APH) and Group Risk Plan (GRP). Revenue insurance plans include Crop Revenue Coverage (CRC), Revenue Assurance (RA) and Group Risk Income Protection (GRIP).
Summary of Plans
For a more detailed description of each of those products see the December 2005 issue of Ag Connection at: http://extension.missouri.edu/agconnection/newsletters/is-05-12.htm
The specific crop insurance products available for each crop may vary by county. Crop insurance products are reviewed each year and the USDA Risk Management Agency announces the products available by county. Typically changes are made where there is a need or a demand arises.
Recently MU Ag Economists did a study comparing how crop insurance has changed in Missouri over the past fifteen years. In 1990 less than two million acres were covered with insurance and by 2005 approximately seven million acres were covered.
The study also includes economic considerations of crop insurance over the past sixteen years. There are two ratios that can be used to examine the cost to benefit by the producer in a given year: the loss ratio and the farmer benefit cost ratio. The loss ratio is calculated by dividing the indemnity paid to the producer by the total premium paid by the producer and the federal government subsidy to the program. Insurance companies must operate with loss ratios less than one or they will be come insolvent. Over the past 16 years, the average has been 0.76 meaning that for every dollar paid in premiums, 76 cents was paid out in indemnities.
The farmer benefit cost ratio is the indemnity paid to the producer divided by the premium paid by the producer. That ratio has averaged 1.67 over the past sixteen years, which means that for every dollar that producers paid in premiums they received $1.67 in insurance indemnities. Clearly, some of the subsidy paid by the government to the insurance companies is returned to the farmer as indemnities.
This is a good time to compare types of crop insurance and visit with your local crop insurance agent.
The entire 13 page Crop Insurance study, which includes data by county is available at: http://agebb.missouri.edu/mgt/cropinsur.pdf . It can be ordered through local extension offices by requesting MP749.
(Author: Mary Sobba, Ag. Business Specialist)
Almost Too Good to Be True
Ag Connection - Ag Connection Newsletter, February 2008
http://extension.missouri.edu/agconnection/newsletters/is-08-02.htm -- Revised: February 01, 2008