Fertilizer Optimization: an unavoidable part of contemporary, productive Agriculture.

The Netherlands has been paralyzed by farmer demonstrations over the country's new environmental targets, which call for a net 50% reduction in Nitrous Oxide and Ammonia emissions by 2030. The goal is to step up our collective efforts to combat climate change. According to the farmers, "it will result in the closure of 50% of the agricultural businesses in the Netherlands." Additionally, there have been protests in solidarity in Poland, Germany, Italy, and Spain.

This incident wasn't unique. Back in 2019, when the German government had imposed a new environmental restriction, farmers in Germany and France were also protesting. The goal of the approach was to prevent water pollution by implementing tougher standards for agricultural input usage. The motivation for this policy resulted from Germany's exposure to significant EU fines for exceeding the nitrate limit found in ground water, which was mostly driven by agriculture. Back then, farmers feared that “German agriculture will disappear, everything will be imported from outside, and that is not at all what the populace wants".

These demonstrations are significant because they serve as a case study for the level of political support for Europe's expensive environmental measures. However, companies will need to make additional sacrifices if they want to reach net zero by 2050, which means that environmental restrictions will tighten even further in the future years. Nobody is quite sure yet, though, how much the Europeans are willing to give up in order to achieve net zero.

It is evident that new environmental measures are required to slow the rate of global warming, and it is also obvious that there will be conflicts between the government's new environmental policy and farmers/agribusinesses. How to address that? I believe we can address this in part by offering transparency through data, allowing the government to build data-driven policy and farm-specific control. On the other hand, if farmers implement improved decision-making methods, they may be certain that it will not lead to the closure of their businesses.

In our research, we discovered that reducing input does not always imply reducing output. Farmers can adopt data-driven decision making methodologies to cope this new policy challenges. So, in our opinion, farmers do not need to be concerned just yet. Furthermore, while the new policies will undoubtedly put additional strain on farming communities, we believe they will also foster new innovation in this space, and European farmers will eventually benefit from "first-mover advantages" in the net-zero space. But input manufacturers /retailers will undoubtedly suffer, but they can innovate better business models to compensate for lower demand. We have some ideas on how to accomplish this. Please contact us if you want to learn more about it.

To illustrate, let's look at nitrogen fertilizer usage in wheat growing in Germany over the last 20 years and see how input consumption has changed as a result of various policy and improved technology, as well as the influence on yield. This will provide us with some foresight into the future and should provide us with ideas on how to grow and transition the agribusinesses in the next years.

Country-wise, crop-specific fertilizer application rates are rarely available since they require a lot of time and effort to gather, analyze, and evaluate. However, there are two thorough publications. The most recent was released in 2022 by International Fertilizer Association (IFA), while the first was by Food and Agriculture Organization of the United Nations (FAO) in 2005. According to the FAO, Germany's fertilization rate for wheat in 2000 was 165 N kg/ha, higher than the global average of 110 N kg/ha. IFA estimates that 150 N kg/ha of fertilizer was applied to wheat in 2018, which is around 9% less than was applied 20 years earlier. Even though these fertilization numbers are questionable, they still demonstrate a decline in Germany's total fertilization rate, which is consistent with German official data (which is about 11 %).

We worked with about 60 German farmers on a European Space Agency (ESA) project. The FAO/IFA fertilizer rate estimates are less than what we have observed throughout the course of our five-year experimental study. According to our research, German farmers used around 220 N kg/ha in 2000, with the goal of achieving the best yield and protein content. However, in 2010 they only used about 195 N kg/ha, an 11% drop. This decrease was mostly driven by the introduction of technology, including portable sensors and soil testing to determine the fertilization rate. After 2017, the fertilization rate started to fall once again as a result of the introduction of German fertilization regulations. During this time, farmers began to make better decisions about fertilization by taking into account the mineral N reserve in the soil (Nmin), pre-crop N credit, and investments in better fertilizer spreader equipment, field sensors, etc.

For wheat, the fertilization rates in 2020 were around 165 N kg/ha. The fertilization rates once again dramatically dropped in 2022 as a result of the current high fertilizer price. The wheat crop had an average fertilization rate of 150 N kg/ha in 2022, a drop of nearly 30% from 2000 – it’s big. However, whether we will see a decline in yield as a result of the reduced fertilization rate remains to be seen. In principle, reduced fertilization should not decrease yield because according to German government fertilization balance estimations, there is still around 80 N kg/ha balance, which was approximately 120 N kg/ha two decades ago. As a result, the reduction is still within acceptable limits and should have no effect on yield. This already indicates that the 2017 fertilizer regulation was a sound plan, and farmers need not be worried. Policymakers may earn farmers' trust by providing such insights at the farm level, resulting in more clarity for customers and, eventually, wider adoption of such new environmental rules. In the following sections, we'll explain why we believe the reduction is still within a reasonable range and should not reduce yield.

What precisely is fertilization optimization? Precision farming is the answer. This includes applying as much fertilizer as the plant requires based on current demand for optimal plant development. It is also important to apply fertilizer at the right time, which means applying fertilizer before plants experience critical deficiency and, if at all possible, shortly before rain so that the fertilizer may swiftly breakdown and become available to the plant. If necessary, liquid fertilizer can also be used. The application of the fertilizer at a right rate in the right places is the final and most crucial component of optimization. Plants require various rates of fertilizer at different parts of the field due to the variable soil productivity, which may be addressed by applying fertilizer at a variable rate.

Now let's talk about the need for fertilization optimization. There are three key aspects: the high cost of fertilizer, fertilizer regulations that force fertilizer rates to be reduced, and complexity brought on by climate change.

1. Fertilizer prices are super high – almost doubled in 2022. So, the approach for fertilization optimization is the obvious choice as it would help farmers retain profitability and improve crop yields while using less inputs. Even if the global energy crisis is resolved, we think the price of fertilizer won't go back to its previous levels. Because of this, the price of fertilizer will continue to be high, thus we need to start focusing more on fertilization optimization.
2. Due to fertilization regulations, farmers are being forced to drastically reduce fertilization rates, while most farmers still do not use variable-rate fertilizer spreaders or tools for data-driven fertilization decision-making. As a result, the yield might decline from a reduction in fertilizer input. Farmers may simply lower their fertilizer input without sacrificing yield or failing to comply with regulations, but in order to do so, they must invest in variable-rate spreaders and make a small extra effort to integrate these new technologies into their farming practices.

The goring season is becoming more and more unpredictable due to climate change, necessitating fertilizer optimization every more important than ever. Since every year is different, the fertilization strategy must change every year to account for the weather, which involves applying more in good years and less in poor years. In comparison to earlier farming practices, this presents a new challenge for farmers, but it may be somewhat overcome by splitting fertilizer applications; use as much as the plant needs at each stage of growth. This implies that farmers need once more pay special attention to making better and reactive fertilization decisions.

We discovered a latent demand for technology for improved fertilization decision making when interacting with farmers this year. According to the farmers, farming was less competitive 20 years ago, and it was reasonably easy, profitable, and enjoyable. However, during the last decade, they have seen how fragile agriculture is as a result of unreliable weather patterns caused by climate change. What exactly do we mean by that? We polled farmers in mid-May and asked them about their wheat yield expectations. The majority of the comments were that they expected a good harvest and that they had applied additional N in the quality round to maximize protein content.

We surveyed the same farmers again at the end of June, and many are no longer expecting a good harvest due to high temperatures and water shortages in mid-June, and some are regretting their quality fertilization decision - they could have fertilized less. The major concern now is how to make better fertilization decisions in the face of unpredictability in the weather. The solution is to make fertilization decisions based on data. We may learn from previous years about field-specific weather-event responses, evaluate field resilience, and use this knowledge into fertilizer decision making.

We have already developed solutions to assist agribusiness, consultants, and farmers in transitioning to sustainable farming and addressing the farming issues caused by climate change. Please visit our website or contact us if you want to learn more about our solution.