Economic evaluation of topsoil loss in spring wheat production in the northern Great Plains, USA

Abstract

Relationships among topsoil removal treatments and additions of nitrogen and phosphorus fertilizer on dryland spring wheat yields in a wheat-fallow rotation were used to determine the on-site effects of topsoil loss and fertilizer applications on net returns and to estimate the value of soil. Yields estimated from a production function and corresponding net returns for spring wheat under alternative soil loss levels and fertilization rates were examined. A numerical optimization routine was used to determine the most efficient levels of fertilizer applications for farm managers at various levels of soil loss. The value of soil in spring wheat production was derived by estimating the accumulated discounted values of production from land without soil loss versus land with soil loss over various planning horizons. Production function estimates indicated that, when all variables were at their mean values and soil loss was varied, the first centimeter of soil loss reduced wheat yeild from 1719 kg ha −1 to 1709 kg ha −1, whereas the last centimeter of loss reduced yield from 1362 kg ha −1 to 1331 kg ha −1. Each additional centimeter of soil loss increased the yield loss. The economic analysis indicates that the optimum amount of N and P that should be applied increases with each increment of soil loss. Fertilizer reduces yield loss to some extent, but net returns continue to decline as soil loss increases. This result confirms that N and P fertilizers are imperfect economic substitutes for soil. Estimated soil values are a function of the farm manager's planning horizon and the natural soil erosion rate. If erosion is occurring at a rate of 44.8 Mg ha −1 year −1, the value of soil ranges from $59.33 ha −1 for a planning horizon of 20 years to $305.48 ha −1 for a planning horizon of 68 years. The equivalent level annuity values of these estimates are $3.99 ha −1 year −1 and $10.58 ha −1 year −1, respectively.