Examining the Profitability of Variable Rate Nitrogen Fertilizer Application in the Digital Revolution
Farming is moving into what is being called the Digital Revolution of Agriculture. This revolution sees the increase in mechanization and automation across the farm sector. For farmers to adopt precision technologies there must be a demonstration of profitability. This paper examines the differences profitability between uniform and variable rate nitrogen fertilizer application in corn production using farm level data from Ontario. To show this difference we calculate profit with simulated fertilizer rates. We estimate field and zone level quadratic yield response functions from farm data provided by farmers who have adopted variable rate technology. We find that variable rate nitrogen application does not have higher profits than uniform rate nitrogen application. This finding is a result of the flatness of yield response functions and the similarity between response functions causing a lack of need for precision.