Estimating Economically Optimal Levels of Nitrogen Fertilizer in No-Tillage Continuous Corn

Stochastic plateau production functions provide improved fertilizer recommendations based on multi-year agronomic experiments where weather and other stochastic variables change over time. This research assesses the profitability of no-Tillage corn production in northeastern Colorado and determines economically optimal nitrogen fertilizer rates. It also proposes an alternative parameterization of the linear response stochastic plateau model which provides a robustness check against traditional parameterizations. Results show the current use of nitrogen fertilizer in the area exceeds estimated economically optimal levels. This suggests that a reduction in nitrogen use could increase expected profits and simultaneously reduce environmental costs.