The profitability of site-specific fertilisation based on Sure Grow Solutions – A Canadian case study

Zimmer, Yelto and Kockerols, Konstantin and Ranscht, Leon (2024) The profitability of site-specific fertilisation based on Sure Grow Solutions – A Canadian case study. STUDIES IN AGRICULTURAL ECONOMICS, 126 (1). pp. 50-56. ISSN 1418-2106 (print); 2063-0476 (online)

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Abstract

This paper presents the outcome from a case study analysis for a Canadian farm that does site-specific fertilisation (SSF), a precision farming approach which takes into consideration the spatial variability of soils. The economic results for three years of wheat and canola production are compared to a neighbouring farm, which is practicing conventional broadcast application of fertilisers. Since no additional investments in machinery are needed, the annual variable cost is 6 CAD/acre. In the standard case, the average profit is 30 CAD/acre. The rather pronounced difference in the effects from SSF application in wheat vs. canola leads one to question whether this is a crop-related systematic outcome or instead represents something more random. Sensitivity analyses generated two main insights. First, the economics of SSF are sensitive to a modification in commodity prices – a 50 % cut would reduce the average profit to about 9 CAD/acre. Second, another scenario calculation in which no-till is assumed to generate a 5% increase in yields suggests that the net profit would be just 7 CAD/acre. Given the existence of so many uncertainties, this paper calls for more farm-based economic analysis of SSF, one which should also include a comparison of different service providers for application maps.

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