Posted 1/10/2019 17:52 (#7235462 - in reply to #7235389) Subject: RE: Fall NH3 vs Fall UREA
So let me approach the ROI question from this perspective. Just add a cart to your existing operation. No need to change anything but knives and hoses then. Now we are comparing apples to apples because if you don't need a new nh3 bar then there is no need to buy a new bar for urea. Now you are also going to be injecting your p&k so you will be saving a broadcast pass of between $3 and $7.5/acre depending on your local coop or independent fertilizer dealer. Your cart, electronics and hosing will be about $50,000 or less if you buy a used JD air cart or something. Se lets assume you are farming 1,000 acres of corn for five years and your cart is worth $25,000 in five years. That places your cost per acre for UREA equipment vs nh3 equipment at $2/acre. Your maintenance cost on a nh3 system is typically higher than it would be on a dry fertilizer cart so we will call that a wash. You can assume at least a 7.5bpa increase in yield on average for very conservative figuring. So lets credit $25 ($3.33/bu x 7.5bu) to increased yield. Your urea on average will cost $.06/unit more than nh3. (though most brokers see that number flipping within 3 years) So add $13.20 to your nitrogen cost using urea. In Summary:
Savings from broadcast pass - +$3
Additional cost of machinery - -$2
Increased Yield - +$25
Addition cost of N - -$13.2
Net increased income per acre: $12.8
Annual ROI on 1,000 acres is 20% ($12,800/$50,000)
5 year ROI assuming 50% depreciation is 178%
These numbers do not include the fact that you can use less nitrogen to achieve these yield increases. You will note on our fall test we used 20 less units than what the coop used. Also does not include the savings when you transition to taking in your fertilizer wholesale as you eventually will do if you go this direction since dry facilities are much cheaper and less permitting cost than nh3 facilities.
Yes we do build dual placement machines and bare nh3 bars. here is a pic of one without the nh3 stuff on it yet. Just has the hitch out the back for pulling tanks and nh3 knives.