An Economic Analysis of Agricultural Crop Production in the Mississippi Delta Under Alternative Nutrient Management Strategies

Author(s): Spencer, D.; Barnes, J.; Coatney, K.; Parman, B.; Coble, K.

Several recent studies have examined how excess nutrient runoff from nitrogen and phosphorous have caused environmental damage in the United States. Perhaps the most significant is the hypoxia zone in the Gulf of Mexico. As a result, regulation of these nutrient levels has emerged as an important step toward environmental stewardship, yet this has been an uneven process. Some states have developed strict regulations to decrease nutrient runoff, but the majority of states have favored broader goals of reducing nutrient runoff using best management practices (BMPs) instead of strict regulations.

This presentation will showcase the empirical results and methodology used to examine the economics of alternative nutrient management strategies that can be used at the farm level to meet alternative standards for nitrogen and phosphorous runoff. We explain how we used a new methodological approach to understand alternative production practices and nutrient management strategy economics from a farm level perspective. The Agricultural Policy and Environmental eXtender (APEX) biophysical simulation model is used along with enterprise budgets to understand the cost impacts of alternative management practices and water quality standards in the Mississippi Delta.

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