Key points

  • Organic fertilisers can improve soil condition and carbon storage, but their effects vary with the type of organic matter, soil type, crop and application method.
  • Modelling showed that combining organic and inorganic fertilisers maintains yields while improving soil health and reducing (or compensating for) the overall fertiliser costs through the value of the added carbon.
  • The project developed a framework and Microsoft Excel-based tool to assess costs, returns, and carbon benefits of using organic fertilisers, helping users identify profitable and sustainable fertiliser strategies.

The challenge

The rising costs of fertiliser and the pressure to farm more sustainably are driving increased interest in organic fertilisers. These products, made from manures, crop residues and recycled organic waste, can supply crop nutrients (thereby reducing reliance on mineral fertilisers), build soil organic carbon and improve long-term productivity.

Their effects, however, are not consistent. Performance is highly variable and depends on soil type, climate, crop type, type of organic material applied (e.g. manure vs green waste) and application method. The amount and form of carbon added also influence how the soil responds over time.

This variation makes it difficult for growers to predict how effective an organic fertiliser will be on their farm, particularly when weighing short-term nutrient value against longer-term soil health gains. The economics add further uncertainty. While the agronomic benefits of organic amendments are well known, data on costs, nutrient value and profitability remain limited. Few studies have assessed how organic and inorganic fertilisers work together or their combined financial impact.

Our research

This project examined how organic fertilisers affect crop performance, soil condition and farm profitability. It aimed to address the uncertainty faced by growers by linking known agronomic effects with new economic evidence.

Understanding organic fertiliser use and impacts

A literature review summarised what is known about the effects of organic fertilisers on soil health, nutrient cycling and crop productivity. Surveys and interviews were undertaken with grain growers in southern New South Wales, conducted online and face-to-face through Holbrook Landcare Network and Soils for Life. The surveys helped identify how organic fertilisers are currently used, why farmers adopt them, and the practical challenges involved with using them.

Modelling crop and soil impacts

The Agricultural Production Systems Simulator (APSIM) was used to model how organic amendments influence crop growth and soil processes. The modelling compared three organic materials (biochar, farmyard manure and chicken manure) applied to wheat, canola and chickpea rotations. Each crop was modelled under a range of management scenarios at Holbrook and Tamworth in New South Wales, representing two regions with different rainfall and soil types.

For each location, three contrasting soil types were included to capture variation in soil texture, water-holding capacity and fertility. The model estimated crop yields, nutrient cycling, soil water movement, and changes in soil organic carbon over time.

Assessing economic feasibility

Results from the APSIM modelling were combined with data from farmer surveys and other sources to evaluate how organic fertilisers affect farm profitability under different soil, crop and management conditions.

For each scenario, gross margins (with and without carbon credit values) and cost-benefit ratios were calculated. The analysis identified the application rates and management combinations that gave the best balance between yield, soil improvement and financial return.

Research findings

Survey results – Understanding organic fertiliser use and impacts

Organic fertiliser use remains low across southern New South Wales. Many growers use organic fertilisers only on a small scale, mainly due to uncertainty about cost-effectiveness, inconsistent results and limited availability. Key barriers include a lack of reliable information on optimal rates, variable product quality and difficulty accessing decision support tools that factor in co-benefits, such as carbon credits. Growers expressed interest in strategies that integrate organic and synthetic fertilisers to manage risk and maintain yield.

Modelling

The modelled results showed that organic fertilisers can improve several aspects of soil function, including soil organic carbon levels, water-holding capacity and nutrient cycling. For example, biochar decomposed slowly, storing carbon in the soil over decades and slightly reducing greenhouse gas emissions. Combining biochar with retained crop residues enhanced these effects.

When combining organic and mineral fertilisers, modelled yield responses were small but consistently positive, indicating that organic amendments can complement rather than replace synthetic fertilisers.

Applying the framework to wheat, canola and chickpea systems revealed how profitability depends on soil type, location, input type and time horizon:

  • Wheat: Biochar generally outperformed farmyard manure, with higher gross margins over 40 years on sandy and duplex soils and over 10 years on heavy clays.
  • Canola: Chicken manure gave the best returns, but the optimal rate and residue management varied by region. Lower rates without residues suited sandy soils at Tamworth, while higher rates with residues were more profitable on heavier soils at Holbrook.
  • Chickpeas: Chicken manure was more profitable on sandy soils, while farmyard manure performed better on heavier soils.

Assessing economic feasibility

The value of organic amendments extends beyond yield improvements. When changes in soil condition, carbon sequestration and potential carbon credit revenue were included, profitability improved in many scenarios. Biochar generally provided the strongest long-term returns due to its persistence in soil and associated carbon storage benefits.

Profitability varied by fertiliser type, rate, soil and crop. When organic amendments such as biochar or chicken manure were applied with mineral nitrogen, crop productivity was maintained at levels similar to full mineral fertiliser programs. This suggests that nitrogen supplied through mineral fertiliser could be partly replaced by nutrients released from the organic materials without reducing yield. This combination also lowered total fertiliser costs and improved long-term profitability once soil improvements and carbon credits were included.

Using organic fertiliser alone may not provide short-term yield reliability and suggests a blended approach can offer a more practical balance between short-term productivity and long-term soil health.

Decision support tool

The project produced a framework and Excel-based tool to assess the economic feasibility of using organic fertilisers in cropping systems. The tool combines yield data from APSIM modelling with information on fertiliser costs, carbon values and management options. It can compare organic, inorganic and mixed fertiliser strategies across different crops, soil types and regions.

For each scenario, the tool calculates gross margins, cost-benefit ratios, and the value of co-benefits such as increased soil carbon and carbon credits. Users can test different application rates, combinations of organic and inorganic fertilisers, and timeframes to identify the most profitable options for their farm. The tool also includes risk checks to show where excessive rates may reduce returns or affect crop productivity.

Significance of findings

The framework and Excel tool allow farmers, advisers and policymakers to evaluate the economic and environmental value of organic fertilisers across different production systems. It provides a consistent way to assess costs, returns, carbon benefits, and risks over both short and long timeframes. By pinpointing the most profitable application strategies based on soil type, residue management and potential carbon credits, it gives farmers clear, science-backed options to boost returns and manage risk.

Beyond the farm gate, the framework supports climate-smart agriculture by linking financial outcomes with sustainability goals. It enables policymakers, agribusiness and researchers to develop practical guidelines for soil management and design effective programs, helping Australian agriculture produce more food with fewer inputs and less environmental impact.

At a local scale, the modelling work provides region-specific evidence on how biochar, chicken manure and farmyard manure perform in different soils and cropping systems. It shows how these materials can sustain yields, improve soil condition and increase carbon storage while reducing reliance on mineral fertilisers.

Next steps

Field trials are needed to test how organic fertilisers perform across different soil types, climates and cropping systems. These trials should measure not only crop yield and nutrient availability but also changes in soil carbon, biological activity and greenhouse gas emissions. The resulting data would help build more reliable emission factors for organic amendments, allowing farmers to accurately estimate and report emission reductions from their farming systems. This information is also essential for verifying carbon sequestration benefits and enabling farmers to participate in emerging carbon market schemes with greater confidence.

Get in touch

For a copy of the Excel tool, please contact project leader, Dr Richard Culas, from Charles Sturt University on rculas@csu.edu.au. Richard welcomes feedback from users of the tool.