The hidden value of Faba Beans in the rotation: The “Rotation Dividend”

Most growers already know why fabas belong in the program.

They’re a genuine rotation crop: they help reset paddocks, shift disease and weed dynamics, and support nitrogen in the system ahead of cereals.

What often gets missed in pricing and marketing conversations is that a portion of the value of Faba Beans doesn’t show up in the faba cheque. It shows up later, in the following crop, as a smaller nitrogen bill (or more flexibility in the nitrogen program).

This GrainSource note puts a simple $/mt number on one piece of that value:

If fabas leave nitrogen behind, what would it cost to buy that nitrogen as delivered urea instead - and what does that equate to per/mt of the faba crop?

To keep it realistic, we also allow for something most growers will raise immediately:

Fabas often cost more to protect than wheat (fungicide).

So the result below is a net rotation dividend: nitrogen value (as urea replacement) minus an allowance for extra fungicide cost in fabas vs wheat.

We’ve kept the maths to a minimum in the main text, and put the full workings at the end for anyone who wants to check the numbers!

What this report includes (and what it doesn’t)

Included

• The residual nitrogen carryover benefit from fabas, valued using delivered urea

• A fungicide adjustment, because fabas commonly require more fungicide protection than wheat.

  
  

Not included (on purpose)

There are other rotation benefits that can be larger again (following wheat responses, disease break effects, weed management flexibility, protein impacts).

Those vary a lot by district and season, so we’ve left them out to keep this report conservative and broadly usable.

Think of this as the minimum rotation value that’s easy to forget.

Key assumptions

Residual nitrogen carryover (base case)

GRDC pulse guidance commonly references residual soil nitrate uplift from a Faba rotation in the order of ~30–40 kg N/ha; we use the midpoint 35 kg N/ha.

Urea price benchmark

We use a benchmark urea price of $760–770/mt FCA (Free Carrier) Geelong, midpoint $765/mt.

Freight assumption

Freight is applied as: $0.16 per km per mt of urea. We test three examples: growers located 200 / 400 / 600 km from urea pickup.

Fungicide allowance (to keep the comparison fair)

We include fungicide because it’s a legitimate “but what about…?” in any rotation discussion.

• GRDC cites an average faba foliar fungicide cost of $55/ha/year.

• For wheat, we assume a “middle” program of $25/ha (not zero, not worst-case).

  
  

So in this report, fabas carry a +$30/ha fungicide allowance compared with wheat.

Yield scenarios

To show how the value shifts across seasons and districts, we show faba yields of:

• 2.5 mt/ha

• 3.5 mt/ha

• 4.5 mt/ha

  
  

Step 1: What does urea cost delivered?

Starting urea price (benchmark): $765/mt

Freight add-on = 0.16 × distance (km)

Distance to pickup	Freight add-on ($/mt)	Delivered urea ($/mt)
200 km	32	797
400 km	64	829
600 km	96	861

Step 2: What is the nitrogen carryover worth per hectare?

Base assumption: 35 kg N/ha residual nitrogen credit. When urea is more expensive delivered, the value of “rotation nitrogen” rises.

Under this benchmark pricing and freight rule, the faba nitrogen carryover is worth roughly $61–$66/ha depending on distance (see workings below).

Step 3: Allow for the extra fungicide spend in fabas

• Faba fungicide average: $55/ha

• Wheat fungicide (mid program): $25/ha

  
  

Allowance against fabas: $30/ha

So the net rotation benefit per hectare (nitrogen value minus this allowance) is roughly $31–$35/ha, depending on distance.

Step 4: Convert to a simple $/mt “rotation dividend”

This is the number you can actually use in pricing conversations.

We divide the net $/ha by the faba yield (mt/ha) and express it as $/mt of faba grain.

Net “rotation dividend” ($/mt faba) — base case

Assumptions: residual N credit 35 kg N/ha, faba fungicide $55/ha, wheat fungicide $25/ha, urea $765/mt, freight $0.16/km/mt.

Distance	2.5 mt/ha	3.5 mt/ha	4.5 mt/ha
200 km	$12.3/mt	$8.8/mt	$6.8/mt
400 km	$13.2/mt	$9.5/mt	$7.4/mt
600 km	$14.2/mt	$10.1/mt	$7.9/mt

How to read this table

• Lower yields make the dividend look bigger (same per-hectare value spread over fewer tonnes).

• Further from urea pickup increases the dividend (delivered urea is higher).

  
  

What does this mean in plain terms?

Under reasonable, conservative assumptions, fabas deliver a net nitrogen-based rotation dividend of about:

~$7 to $14 per mt of faba grain

That’s before we even talk about other rotation upsides (disease break impacts, following wheat responses, herbicide flexibility).

In other words: this is the ‘quiet value’ that can disappear when fabas are judged only as a cash crop. The dollar figure isn’t huge, but it’s a genuine rotation dividend - and it arrives alongside a natural boost to soil nitrogen.

Why urea price can boost or drop the dividend

Urea is one of the most variable input costs in the system. Some seasons it’s relatively manageable; in others it moves sharply, driven by global energy markets, supply disruptions, freight, and currency.

That matters here because the “rotation dividend” is priced against urea. When urea is expensive, the value of nitrogen carried forward from fabas rises; when urea is cheaper, the dividend narrows.

So the dividend isn’t a fixed number — it moves with the fertiliser market — but the principle holds: fabas deliver “home-grown nitrogen” in the rotation, and the more expensive bought nitrogen becomes, the more valuable that contribution is.

Figure: As urea becomes more expensive, the value of nitrogen carried forward from fabas increases, lifting the rotation dividend. Lines show the impact at 200/400/600 km from pickup under the freight rule used in this report, and a 3.5mt/ha yield only.

Summary

Faba beans are best understood as a rotation crop first, not a pure cash crop. A meaningful part of their value is “quiet” — it shows up in the following cereal as home-grown nitrogen, not in the faba cheque.

Using conservative assumptions (35 kg N/ha residual N credit, a mid wheat fungicide program, and delivered urea with freight), the nitrogen benefit — after allowing for extra faba fungicide — equates to a net rotation dividend of roughly $7–$14 per/mt of Faba Beans across the yield and distance scenarios tested.

That dividend is not fixed: it moves with the urea market. When urea is expensive delivered, the rotation dividend grows; when urea is cheaper, it narrows. Either way, it’s a useful reminder that fabas can deliver value even when they don’t “win” on headline price alone.

So the next time a Faba Bean bid is a few dollars short of expected returns - don't forget to include"The Rotation Dividend" in the calculations!

Reference section (workings, for anyone who wants to check)

You don’t need this section to understand the story, but it’s here so the numbers are transparent.

1) Delivered urea price ($/mt)

Delivered urea ($/mt) = $765 + (0.16 × distance km)

2) Convert urea $/mt to $/kg of nitrogen

Urea is 46% N, so 1mt urea contains 460 kg N.

Cost per kg N ($/kg N) = Delivered urea ($/mt) ÷ 460

3) Value residual nitrogen carryover per hectare ($/ha)

Base case residual N = 35kg N/ha

N value ($/ha) = 35 × cost per kg N

4) Fungicide allowance ($/ha)

Faba fungicide = $55/ha

Wheat fungicide (mid) = $25/ha

Extra fungicide allowance = 55 - 25 = 30

Net benefit ($/ha) = N value - 30

5) Convert to $/mt faba

Rotation dividend ($/mt faba) = Net benefit ($/ha) ÷ yield (mt/ha)