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Soil fertility decline and soil management for crop production are important issues for grain growers in northern New South Wales and southern and central Queensland. In this paper a stochastic dynamic economic analysis of soil fertility management is presented to derive optimal fertility levels, and the management practices to achieve them. A sequential analysis of first deriving the optimal nitrogen stock and application, ceteris paribus, was followed by an assessment of tillage, stubble and fertiliser strategies to obtain an optimal level of soil organic carbon in the soil. The recommended management practices are compared with levels of current usage in the region. The derivation of optimal levels of soil fertility for agricultural purposes may have other policy implications.


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