Nitrogen Management under Uncertainty: An Investigation of Farmers’ Decision Processes

Des Moines Water Works has recently threatened a lawsuit against three upstream Iowa counties they claim are responsible for excessive nitrate loading in the Raccoon and Des Moines rivers. Excess nitrate loads, which must be reduced before water is safe to drink, is reported to have cost Des Moines taxpayers upwards of $1 million in 2013. The cost of nitrate removal, which could include investment in new treatment capacity, will continue, and may grow, unless steps are taken to reduce nitrate runoff from agriculture. While such water treatment is costly, yield losses may be more costly if rates are capped by regulations. The problem is complicated because of uncertainty over weather and soil conditions producers face when making their nitrogen use decisions. Furthermore, weather largely dictates how much of the applied nitrogen leaves the fields