Profitability and downside risk implications of site-specific nitrogen management with respect to wheat grain quality

Profitability analyses of site-specific nitrogen (N) management strategies have often failed to provide satisfying reasons for adoption of precision farming technologies. However, effects of precision farming on product quality and price premiums, as well as on downside risk mitigation, are generally not taken into account. This study aimed to evaluate the comparative advantages of site-specific N management over uniform N management considering N supply on grain quality, and accordingly price premiums for wheat from a downside risk point of view. A virtual field was modelled with two subfields representing two distinctive yield zones to investigate how consideration of grain quality affects the economic potential of site-specific N management under temporally varying N mineralization and changing price patterns of wheat. Moreover, the extent was investigated to which site-specific N management can have a risk-reducing effect on economic shortfalls compared to uniform N management. Two site-specific N management options were assessed: variable N rate application using yield mapping and N sensor for real-time proximal sensing. Results indicated that even though crop yields were only slightly higher, higher expected protein contents of grains could be achieved with site-specific N management options compared to uniform N management. Baking wheat quality was secured to a greater extent with site-specific N management options. Higher average grain quality improved the economic benefits due to price premiums. A risk-reducing effect was observed with the site-specific N management by maintaining the baking wheat quality with a higher probability. Higher economic returns mostly compensated the additional costs for the precision farming technologies in the lower tail of the probability distribution and, thus, site-specific N management did not show any substantial disadvantage on downside risk as compared to uniform N management.