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Abstract

The producer value of reducing temporal uncertainty concerning the level of soil nitrate is estimated for corn production in Iowa. The reduction in uncertainty is obtained through use of a late-spring nitrate test. Parametric representations of conditional densities of soil nitrates are used along with an estimated production function to estimate optimal nitrogen fertilizer applications under both uncertainty and certainty for a representative risk-neutral Iowa corn farm. Results indicate that decreasing uncertainty could reduce average fertilizer applications by up to 38% and that producer returns could be increased by up to $22.08/acre.

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