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Abstract

Recent increases in fertilizer, particularly nitrogen, and fuel price have resulted in increased production cost for farmers. In this paper a farm level production model that compare uniform and variable rate fertilizer (NPK) application is developed that permits an analysis of the economic performance of fertilizer management regarding profitability. Results show that farmer's exposure to fertilizer and fuel prices risk have substantial impact both on the expected net returns and production practices for producers both uniform and variable rate technology.

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