Economic Analysis of Conventional and Alternative Nutrient Management Approaches

Abstract

During times of economy uncertainty, such as the current period, all costs of agricultural production become important and worthy of close scrutiny if the threat of farm foreclosures is to be minimized. This concern particularly applies to the cost of plant nutrients, which, under conventional approaches, can typically represent 24–30% (or more) of the total variable cost of production. The purpose of this chapter is to examine the physical effects, economics, profitability, and sustainability of various plant nutrient management strategies—both conventional and alternative one—in an attempt to identify those strategies that can lead to resource optimization, maximization of profits for farm enterprises, and long-term farm sustainability and survival. The results of this analysis include the following: conventional nutrient management systems, using commercial synthetic fertilizers, can show higher profit for most grain crops (with the exception of corn and sorghum) than organic nutrient management alternative nutrient management strategies for increasing farm profitability. A cover crop system can produce higher yield, higher gross margin, and lower crop yield variation, when compared to no-tillage conventional, manure-based, and crownvetch systems. Manure-based systems that do not require purchase or transport of the manure (as in combined animal and crop production systems) can be considerably more profitable than conventional systems. Both manure-based and cover crop systems that do not include the use of commercial fertilizers (i.e. organic systems) hold particular promise due to the output price premiums typically garnered by the organic crops grown under such conditions. Under dry soil conditions, manure-based systems can provide higher levels of soil organic matter and stimulate the growth of soil organisms that are beneficial to plant nutrient uptake and crop yield.