Owners and tenants may have different ideas of risk, or their capital positions may differ so that one of them may be unwilling to apply as much fertilizer as would be most profitable. Their ideas also may differ as to expected response. A simple field trial with a few selected rates of nutrients and competent interpretation of tests of soil samples should be particularly useful in such instances.

THE FARMER'S CAPITAL POSITION the amount of money he has or can borrow to spend for fertilizer also influences his decision about using fertilizers. If funds and credit are unlimited, the farmer may wish to apply the most profitable rate on all acres of all crops. That is not usually the case, however, and the problem becomes one of the most profitable distribution of a specified amount of fertilizer in the farming system.

Results from use of fertilizer at different rates on corn, oats, and hay in the Corn Belt help to illustrate this problem. The most profitable rates involve an expenditure of about 33 dollars an acre for corn, 15 dollars for oats, and 9 dollars for hay. A typical farm organization in the area from which the results were obtained is 70 acres in corn, 42 acres in oats, and 25 acres in hay. If all the crops are fertilized at the most profitable rates, the total cost of fertilizer is 3,165 dollars. If each crop is fertilized so that the marginal return per dollar spent is 3 dollars, the total cost of fertilizer would be 1,693 dollars. The assumption here is that 1,693 dollars is all the farmer has or can obtain to spend for fertilizer. What is the effect of distributing this expenditure differently among the three crops?

To get the most profit from a limited expenditure, the distribution must be such that the marginal return per dollar spent is the same on all crops-3 dollars, in this instance. If the fertilizer is distributed in this way, the return above the cost of fertilizer for the acreages of all crops on the farm is 10,270 dollars. But if all the fertilizer is put on corn at the most profitable rate, only about 52 acres can be treated. Thus 18 acres of corn and all acres of the other crops are left untreated. The return above the cost of fertilizer for the farm is 8,185 dollars a reduction of 2,085 dollars from that obtained when fertilizer is used so that marginal returns are the same on all crops.

The response of different crops to fertilization influences the kind of rotation that would be most profitable.

On soils of medium to low productivity, inclusion of some forage in the rotation usually results in production of more grain per 100 acres of cropland than if an all-grain cropping system were followed. As the percentage of cropland in forage is increased, however, a point is reached after which use of more of the cropland for forage will reduce the total production of grain from the rotation. At that point, grain production and forage production become competitive. More forage can be produced only at the sacrifice of grain. The relationship on productive soils may be competitive from the start that is, the use of any of the cropland for forage will result in the production of less grain from the land included in the rotation.

Moderate to high rates of fertilizer, particularly nitrogen, usually increase yields of grain more than they increase yields of forage crops commonly used in rotations. As more of the cropland is used for forage in well-fertilized rotation, therefore, more grain is sacrificed per pound of forage gained than when more forage is included in the same rotation without fertilization.

For example, an unfertilized rotation in a study in the Corn Belt showed a higher annual value of crop production as the acreage of hay was increased to about 30 percent of the cropland. The value was reduced if more acres of forage were added. But if the rotation were fertilized, the annual value of all crops produced would be higher for the all-grain rotation after deducting the cost of fertilizer than if forage were included.

GOOD FERTILIZER PRACTICES accompanied by other good management practices provide a profitable substitute for forage in the rotation of some soils. More specifically: Nitrogen provides a profitable substitute for legumes when crop residues are properly handled on soils where slope and soil physical characteristics permit sustained high yields without inclusion of legumes or grasses in the rotation.

The effect of using fertilizers on the production relationship between grain and forage has been shown. But the decision as to the substitution of nitrogen for legumes is also influenced by the price of forage crops in comparison with the price of grain. The production relationship and the price relationship are considered together in making the decision, when more forage production can be obtained from the rotation only at the sacrifice of grain. Then the most profitable combination of grain and forage acreage is that at which the amount of grain sacrificed to obtain a pound of forage is equal to the ratio of the price of forage to the price of grain. For example: At the highest profit grain-forage acreage combination, pounds of grain sacrificed divided by pounds of forage gained is equal to price per pound of forage divided by price per pound of grain.

If a pound of forage is worth one-third as much as a pound of grain, it would be unprofitable to increase the acreage of forage beyond the point where more than one-third of a pound of grain is sacrificed to obtain a pound of forage. In a well-fertilized rotation,loss of one-third of a pound of grain per pound of forage gained would probably occur at a lower acreage of forage than if the rotation were unfertilized.

In deciding whether to substitute fertilizer for forage crops in a rotation, one has to consider also the nature of the soil and the type of farming. Some soils need certain types of cropping to maintain physical condition that will permit profitable response from fertilizer. Also, the structure of some soils may require occasional legumes or grasses to keep them in good tilth. A tendency of a soil to excessive erosion also needs to be considered unless erosion can be controlled by other methods. Then, some farmers can get more than market value from forage and other feed crops by efficient livestock operations.

Fertilizers can aid in making profitable changes in farming. Farmers can reduce unit costs and increase the margin of return over total cost by increasing rates of application of fertilizer on principal cash and feed crops. This puts them in stronger position to make investments in soil conservation and soil improvements often needed when shifting acreage from surplus crops to other uses. Many cotton-livestock farms were once cash-crop farms. For many farmers, however, making this shift involves a substantial net cost that presents a major problem in efforts to adjust to changes in supply-demand relationships.

The first farmers to adopt new improvements that result in higher yields gain most from advancing technology. As adoption becomes more general, total production is increased. Some of the increases may occur more rapidly than the market can absorb them at prices profitable to most farmers. This brings a need for changes in farming, and the transition problem becomes difficult, particularly for farmers who do not or cannot adopt the new methods. Individual farmers who can do so, adopt them and thereby increase their net returns.