Modern agriculture is based on the notion that nitrate is the main source of nitrogen (N) for crops, but nitrate is also the most mobile form of N and easily lost from soil. Efficient acquisition of nitrate by crops is therefore a prerequisite for avoiding off-site N pollution. Sugarcane is considered the most suitable tropical crop for biofuel production, but surprisingly high N fertilizer applications in main producer countries raise doubt about the sustainability of production and are at odds with a carbon-based crop. Examining reasons for the inefficient use of N fertilizer, we hypothesized that sugarcane resembles other giant tropical grasses which inhibit the production of nitrate in soil and differ from related grain crops with a confirmed ability to use nitrate. The results of our study support the hypothesis that N-replete sugarcane and ancestral species in the Andropogoneae supertribe strongly prefer ammonium over nitrate. Sugarcane differs from grain crops, sorghum and maize, which acquired both N sources equally well, while giant grass, Erianthus, displayed an intermediate ability to use nitrate. We conclude that discrimination against nitrate and a low capacity to store nitrate in shoots prevents commercial sugarcane varieties from taking advantage of the high nitrate concentrations in fertilized soils in the first three months of the growing season, leaving nitrate vulnerable to loss. Our study addresses a major caveat of sugarcane production and affords a strong basis for improvement through breeding cultivars with enhanced capacity to use nitrate as well as through agronomic measures that reduce nitrification in soil.