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.

Little is known about the impact of corn and energy prices on the profitability of irrigating corn in Tennessee. We evaluated the probability of a positive net present value (NPV) for center-pivot irrigation in Tennessee corn production. Three corn price series were employed to evaluate the effects of the shift in corn prices on the feasibility of irrigation. The recent rise in corn prices increased the probability of NPV being positive for irrigation investment. Future corn prices will need to remain high for investment in center-pivot irrigation to remain profitable under Tennessee growing conditions.

Deterministic and stochastic yield response plateau functions were estimatedto determine the expected profit-maximizing nitrogen rates, yields, and netreturns for corn grown after corn, cotton, and soybeans. The stochasticresponse functions were more appropriate than their deterministiccounterparts, and the linear response stochastic plateau described the datathe best. The profit-maximizing nitrogen rates were similar for corn aftercorn, cotton, and soybeans, but relative to corn after corn, the expectedcorn yield plateaus increased by 12% and 16% after cotton and soybeans,respectively. Expected net returns increased for corn after cotton andsoybeans relative to corn after corn.