## Masters Theses

#### Date of Award

12-2002

#### Degree Type

Thesis

#### Degree Name

Master of Science

#### Major

Agricultural Economics

#### Major Professor

Rolant K. Roberts

#### Committee Members

Burton English, James Larson

#### Abstract

Efficient nitrogen (N) fertilization practices increase the economic benefit of N in wheat (Triticum aestivum L.) production and the timing of N in wheat production is an important management decision. Although N fertilization increases wheat yields, it can also affect production risk measured by yield variability (risk). Yield and risk can also be affected by interactions among N source, N rate, N timing and disease severity. Because of production risk, some farmers may apply more N than can be efficiently utilized by the crop and if N fertilization is not timed for accelerated N uptake by the plant, optimal yields are not obtained. By adjusting application of N fertilizer to efficient levels and adjusting the application date of N fertilizer to optimize N uptake, farmers can achieve greater economic returns.

The first objective of this research was to evaluate the effects of N source, N rate, N timing and disease severity on expected yield and risk in wheat production and to evaluate the risk-and-return trade-offs among alternative N sources for farmers with different risk preferences. The second objective was to determine utility-maximizing N rates, N fertilization dates, yields, and net returns.

A Just-Pope econometric analysis isolates the impacts of changes in input use on both expected yield and risk. The model takes the form:

(1)Y_{t} = ƒ(X_{t,}β)+*h*(Z_{t,}α)ε_{t,}

where Y was wheat yield (bu/acre); X and Z were matrices of explanatory variables; t was a subscript for year; β and α were parameter vectors; and )ε was a random error term with a mean of zero. The production function,ƒ(X_{t,}β), relates X_{t} to mean wheat yield. The variance function, *h*(Z_{t,}α)ε_{t,}, associates Z_{t} to risk.

The estimated mean yield response function and the variance function for each N source were used to predict certainty equivalent. The certainty equivalent maximizing N fertilizer levels and dates for each N source were found for risk neutrality (λ = 0) and two levels of risk aversion (λ = 0.01 and λ = 0.02).

The estimated coefficients for N and N^{2} were positive and negative, respectively, but the N^{2} coefficients for Urea and UAN were not significantly different from zero. The coefficients for time and time^{2} were positive and negative, respectively.

The coefficient for the N-Take-All interaction (NTA) for Urea was significant at the 10-percent level and the N-Glume-Blotch interaction (NG) for UAN was significant at the 1-percent level. Notwithstanding the significance of these coefficients in the regressions, the F-tests indicated that N did not affect risk for any N source when all N variables (N, NG, NTA) were considered jointly. No time coefficients had an affect on risk.

Each N source was evaluated under the assumption of risk neutrality (λ = 0) and two level of risk aversion (λ = 0.01 and λ = 0.02) for mean disease ratings. In this evaluation neither N nor time had an affect on risk. At mean values of the disease variables, AN was the utility maximizing N source regardless of the farmer's risk preferences.

AN was the utility maximizing N source, with an optimal N rate around 90 lb/acre and an optimal fertilization date of March 8 regardless of the individual's risk aversion level.

#### Recommended Citation

Walters, Jeremy Tate, "Effects of risk on optimal nitrogen fertilization rates and dates in winter wheat production as affected by disease and nitrogen source. " Master's Thesis, University of Tennessee, 2002.

https://trace.tennessee.edu/utk_gradthes/6555