Abstract
AbstractStochastic plateau production functions provide improved fertilizer recommendations based on multi-year agronomic experiments where weather and other stochastic variables change over time. This research assesses the profitability of no-tillage corn production in northeastern Colorado and determines economically optimal nitrogen fertilizer rates. It also proposes an alternative parameterization of the linear response stochastic plateau model which provides a robustness check against traditional parameterizations. Results show the current use of nitrogen fertilizer in the area exceeds estimated economically optimal levels. This suggests that a reduction in nitrogen use could increase expected profits and simultaneously reduce environmental costs.
Highlights
In accordance with von Liebig’s Law of the Minimum, researchers frequently use plateau production functions to empirically assess the response of crop yields to inputs
While the stochastic plateau production function has been applied to a number of different crops including wheat, winter rye, and cotton (Biermacher et al, 2009; Harmon et al, 2016; Roberts et al, 2011; Taylor et al, 2010), there are relatively few applications in corn yields and most of them have been conducted in Tennessee (Boyer et al, 2013, 2014, 2015)
This suggests that continued work in optimal nitrogen recommendations is warranted, if longer-term experiments allow researchers to bring the advantages of the stochastic plateau production function to bear
Summary
In accordance with von Liebig’s Law of the Minimum, researchers frequently use plateau production functions to empirically assess the response of crop yields to inputs. Because of the plateau form of the production function, an increase in the use of inputs does not necessarily translate into a marginal change in output Based on these observations, we determine economically optimal nitrogen rates in northeastern Colorado, as relatively little is known about optimal nitrogen levels of irrigated no-tillage continuous corn in the study area. We compare the reported use of nitrogen among local corn producers and recommended levels from extension services to optimal nitrogen levels estimated in this study The results of this comparison suggest the overuse of nitrogen with negative impacts on producer profits and presumably poorer environmental outcomes. This suggests that continued work in optimal nitrogen recommendations is warranted, if longer-term experiments allow researchers to bring the advantages of the stochastic plateau production function to bear. By incorporating more variation in weather and other stochastic variables affecting crop response through extended data, agricultural economists will be able to provide more accurate input recommendations and assessments of the economic impacts of input use
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