This paper develops a management zone delineation procedure based on a spatial statistics approach and evaluates its economic impact for the case of Texas cotton production. With the use of an optimization model that utilizes a yield response function estimated through spatial econometric methods, we found that applying variable N rates based on the management zones delineated would result in higher cotton yields and higher net returns, above Nitrogen cost, relative to uniformly applying a single N rate for the whole field. In addition, a variable rate N application using the delineated management zones produced higher net returns, above Nitrogen cost, relative to a variable N rate system where the zones are based solely on landscape position. This is indicative of the potential economic value of using a spatial statistics approach to management zone delineation.


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