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Economics of Variable Applied Nitrogen Fertilizer By Brad W Collier

Economics of Variable Applied Nitrogen Fertilizer By Brad W Collier. Economic Advantages of Precision Application. By properly allocating inputs Reduces variable cost Increases operator net revenue Reduces economic Bads Future developments Measure of feasibility “EVIS”

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Economics of Variable Applied Nitrogen Fertilizer By Brad W Collier

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  1. Economics of Variable Applied Nitrogen Fertilizer By Brad W Collier

  2. Economic Advantages of Precision Application • By properly allocating inputs • Reduces variable cost • Increases operator net revenue • Reduces economic Bads • Future developments • Measure of feasibility “EVIS” • Infield economic evaluation of a crop

  3. Variable Cost • Traditional variable input cost • Price of the input • Standard application rate • Precision variable input cost as a function of EVIS • Price of the input • Degree of variability in a field or SD(insey) • Response index for each production unit

  4. Increases Farm Net Revenue • Avoiding excess application of inputs where they could not be used by a growing crop. This technology is not a output increasing technology but a input reducing technology. Therefore the advantage will be shifted from the consumer to the producer.

  5. Reduces Economic Bads • Ground water quality • Fish and wildlife department • Nutrient balancing legislation

  6. Future Developments • Estimated variable input significance “EVIS” • Infield economic evaluation of a crop

  7. Measure of Feasibility Estimated Variable Input Significance“EVIS”

  8. Collecting an EVIS Score • Use a ATV mounted senor and GPS make a random survey of the field. Then a pass through the nitrogen rich strip

  9. “EVIS Score” Use OSU software to evaluate each field EVIS = ( pi per ton * SD insey * (RI – 1)) High significance score .793 = (500 * .001586 * 2-1) Low significance score .299 = (500 * .000599 * 2-1)

  10. Develop an Input Savings Rate From EVIS Input savings as a function of EVIS Proposed formula Savings = EVIS * AVC * number of units • High significance score $1903 = (.793 * 15 * 160) per field • Low significance score • 717.6 = (.299 * 15 * 160) per field

  11. Benefit of EVIS • Evaluate feasibility of variably applied fertilizer. • Easer to sell the technology if you can demonstrate a benefit on a per client basis. • If variable applicator is not needed it would give the client an Insey to calculate average fertilizer rates from.

  12. Infield Economic Evaluation of a Crop Using Fundamental Economics Analyst

  13. Four Levels of Efficiency • Maximize average yield • Maximize marginal yield • Maximize total yield • Maxim economic yield

  14. Input <> Output Price Fertilizer $.25 Price Wheat $3.00 Average Marginal Economic VMP = Pi Max yield

  15. Input <> Output

  16. Problems With IO Modeling • The relationship between nitrogen and yield is also effected by response index, GDD, available water, type of soil and many other factors. • For it to work agronomist researchers must find a model to evaluate the relationships of each of the variables.

  17. In Conclusion At present time it is my opinion that this technology will pay for itself and with additional research and farm level education it could prove to be a viable technology for generations to come.

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