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Determining Optimal Levels of Nitrogen Fertilizer Using Random Parameter Models

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  • Tumusiime, Emmanuel
  • Brorsen, B. Wade
  • Mosali, Jagadeesh
  • Johnson, Jim
  • Locke, James
  • Biermacher, Jon T.

Abstract

The parameters of yield response functions can vary by year. Past studies usually assume yield functions are nstochastic ‘‘limited’’ stochastic. In this study, we estimate rye– ryegrass yield functions in which all parameters are random. The three functional forms considered are the linear response plateau, the quadratic, and the Spillman-Mitscherlich. Nonstochastic yield models are rejected in favor of stochastic parameter models. Quadratic functional forms fit the data poorly. Optimal nitrogen application recommendations are calculated for the linear response plateau and Spillman-Mitscherlich. The stochastic models lead to smaller recommended levels of nitrogen, but the economic benefits of using fully stochastic crop yield functions are small because expected profit functions are relatively flat for the stochastic yield functions. Stochastic crop yield functions provide a way of incorporating production, uncertainty into input decisions.

Suggested Citation

  • Tumusiime, Emmanuel & Brorsen, B. Wade & Mosali, Jagadeesh & Johnson, Jim & Locke, James & Biermacher, Jon T., 2011. "Determining Optimal Levels of Nitrogen Fertilizer Using Random Parameter Models," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(04), November.
  • Handle: RePEc:ags:joaaec:117949
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    References listed on IDEAS

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    1. Babcock, Bruce A., 1992. "Effects of Uncertainty on Optimal Nitrogen Applications (The)," Staff General Research Papers Archive 10588, Iowa State University, Department of Economics.
    2. Taylor, Karen W. & Epplin, Francis M. & Brorsen, B. Wade & Fieser, Brian G. & Horn, Gerald W., 2010. "Optimal Grazing Termination Date for Dual-Purpose Winter Wheat Production," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 42(01), pages 87-103, February.
    3. Pollak, Robert A. & Wales, Terence J., 1991. "The likelihood dominance criterion : A new approach to model selection," Journal of Econometrics, Elsevier, vol. 47(2-3), pages 227-242, February.
    4. Jon T. Biermacher & B. Wade Brorsen & Francis M. Epplin & John B. Solie & William R. Raun, 2009. "The economic potential of precision nitrogen application with wheat based on plant sensing," Agricultural Economics, International Association of Agricultural Economists, vol. 40(4), pages 397-407, July.
    5. Kaitibie, Simeon & Epplin, Francis M. & Brorsen, B. Wade & Horn, Gerald W. & Krenzer, Eugene G. & Paisley, Steven I., 2003. "Optimal Stocking Density for Dual-Purpose Winter Wheat Production," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 35(01), pages 29-38, April.
    6. Gelson Tembo & B. Wade Brorsen & Francis M. Epplin & Emílio Tostão, 2008. "Crop Input Response Functions with Stochastic Plateaus," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 424-434.
    7. B. Brorsen & Francisca Richter, 2012. "Experimental designs for estimating plateau-type production functions and economically optimal input levels," Journal of Productivity Analysis, Springer, vol. 38(1), pages 45-52, August.
    8. Roberts, David C. & Brorsen, B. Wade & Solie, John B. & Raun, William R., 2011. "The effect of parameter uncertainty on whole-field nitrogen recommendations from nitrogen-rich strips and ramped strips in winter wheat," Agricultural Systems, Elsevier, vol. 104(4), pages 307-314, April.
    9. Mooney, Daniel F. & Roberts, Roland K. & English, Burton C. & Tyler, Donald D. & Larson, James A., 2008. "Switchgrass Production in Marginal Environments: A Comparative Economic Analysis across Four West Tennessee Landscapes," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6403, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    Cited by:

    1. Park, Seong C. & Brorsen, B. Wade & Stoecker, Arthur L. & Hattey, Jeffory A., 2012. "Forage Response to Swine Effluent: A Cox Nonnested Test of Alternative Functional Forms Using a Fast Double Bootstrap," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 44(04), pages 593-606, November.
    2. Mkondiwa, Maxwell Gibson, 2015. "Whither Broad or Spatially Specific Fertilizer Recommendations?," Master's Theses 237344, University of Minnesota, Department of Applied Economics.
    3. Park, Seong Cheol & Vitale, Jeffrey D. & Turner, Jason Clemn & Stoecker, Arthur L. & Hattey, Jeffory A., 2011. "Economic Potential of Swine Effluent in Intensified Forage Systems in the Southern Plains," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers.
    4. Harmon, Xavier & Boyer, Christopher N. & Lambert, Dayton M. & Larson, James A., 2017. "Temporal Frequency Of Soil Test Information Effects On Returns To Potassium Fertilization In Cotton Production," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 49(02), pages 251-272, May.
    5. Harmon, Xavier & Boyer, Christopher N. & Lambert, Dayton M. & Larson, James A. & Gwathmey, C. Owen, 2016. "Comparing the Value of Soil Test Information Using Deterministic and Stochastic Yield Response Plateau Functions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(2), May.
    6. Boyer, Christopher N. & Larson, James A. & Roberts, Roland K. & McClure, Angela T. & Tyler, Donald D. & Smith, S. Aaron, 2014. "Probability of Irrigated Corn Being Profitable in a Humid Region," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162470, Southern Agricultural Economics Association.
    7. Agarwal, Sandip Kumar, 2017. "Subjective beliefs and decision making under uncertainty in the field," ISU General Staff Papers 201701010800006248, Iowa State University, Department of Economics.
    8. Boyer, Christopher N. & Larson, James A. & Roberts, Roland K. & McClure, Angela T. & Tyler, Donald D. & Zhou, Vivian, 2013. "Stochastic Corn Yield Response Functions to Nitrogen for Corn after Corn, Corn after Cotton, and Corn after Soybeans," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 45(04), pages 669-681, November.
    9. Brorsen, B. & Ouedraogo, Frederic, 2015. "Using Bayesian Estimation Methods to Determine Optimal Levels of Nitrogen Fertilization," 2015 Conference, August 9-14, 2015, Milan, Italy 211373, International Association of Agricultural Economists.

    More about this item

    Keywords

    cereal rye–ryegrass; Monte Carlo; nitrogen; random parameters; stochastic plateau; Production Economics; Q10; C12; D24;

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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