Dynamic Optimization of Nitrogen Use in Agriculture

Agricultural production is highly dependent on inorganic substances including fertilizers. High-yielding crop varieties, such as corn, require large amounts of primary nutrients including nitrogen, phosphorus and potassium. Farmers often add a surplus of nutrients to crops to maximize yields. Utilization of primary nutrients has increased by more than 300% while that of nitrogen alone has increased by more than 600% between 1960 and 2007 (USDA, 2009). From 1964 to 2007, the use of nitrogen in the corn sector alone increased from 1,623,000 to 5,714,000 nutrient tons (USDA, 2009). While increasing production, increased fertilizer use can potentially create negative externalities in the form of nitrate-nitrogen contamination in groundwater. Groundwater is the source of drinking water for about half the total U.S. population and nearly all of the rural population, and it provides over 50 billion gallons per day for agricultural needs (USGS, 2009). In the U.S. the main source of nitrate pollution in the groundwater results from the actions of farmers through the use of fertilizers and other chemicals (Haller, et al. 2009). Nitrogen-nitrate contamination can have adverse human affects including methemoglobinemia or ―blue-baby‖ syndrome (Majumdar, 2003). The potential for nitrate contamination in corn production is especially problematic as corn alone accounts for over 90% of feed grains produced in the U.S. (USDA, 2009). The USDA estimates that approximately 80 million acres of land is planted to corn, with the majority in the Heartland region (the Midwest) of the U.S. (2009). The Heartland region is primarily rural and much of the population there derives its drinking water from groundwater. Therefore, the potential for groundwater contamination is greatly increased in this region.Environmental Economics, Nitrogen/Nitrate Contamination, Dynamic Optimization, Agriculture, Agricultural and Food Policy, Demand and Price Analysis, Environmental Economics and Policy, C61, C63, Q10, Q51, Q53,