Economics of phosphorus fertiliser use on pastures 4. Incorporating risk

Abstract

Abstract The models used for generating recommendations for phosphorus fertiliser use on New Zealand pastures were extended to incorporate the risk associated with environmental variabilty. A series of Monte Carolo experiments was conducted to compare the means and variances of gross margins from different fertiliser strategies. Stochastic dominance analysis was used to seek preferred strategies. The uncertain nature of the level of production if phosphatic fertiliser is withheld and the consequence of variability in the measured Olsen P soil test values were considered.