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Cost- and Risk-Efficient Nitrogen Fertilizer Application for Cereals Considering Farmers’ Risk Aversion

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  • Karatay, Yusuf Nadi
  • Meyer-Aurich, Andreas
  • Kirschke, Dieter

Abstract

Nitrogen (N) fertilizer is an essential input for plant growth and farm profitability, while its effects on coping with economic risk mitigation has been under discussion. The present study analyzes economic response of rye and wheat to N fertilizer, and compares them with respect to risk mitigation potential. Due to quality induced premiums for baking quality for wheat, uncertainties of yield response and price resulted in higher expected profit with higher N rates than the optimal fertilizer level following the average response. Protein price incentives reduced the riskiness of higher N rates for wheat, whereas higher N rates led to lower certainty equivalents and higher downside risk for rye.

Suggested Citation

  • Karatay, Yusuf Nadi & Meyer-Aurich, Andreas & Kirschke, Dieter, 2019. "Cost- and Risk-Efficient Nitrogen Fertilizer Application for Cereals Considering Farmers’ Risk Aversion," 59th Annual Conference, Braunschweig, Germany, September 25-27, 2019 292305, German Association of Agricultural Economists (GEWISOLA).
    • Handle: RePEc:ags:gewi19:292305
    DOI: 10.22004/ag.econ.292305
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    Keywords

    Farm Management; Production Economics; Risk and Uncertainty;
    All these keywords.

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