Opportunity Cost of Precision Conservation

Conservation practices provide public environmental benefits, but the associated private costs are chiefly borne by farmers. Precision agriculture technologies can help reduce farmer private costs by identifying low-yielding areas, thereby minimizing foregone revenue. This study estimates the opportunity cost of such precision conservation on 29 commercial fields in Michigan, USA, using fine-scale yield maps collected between 2020 and 2024. We employ spatial regression models and Monte Carlo simulations to account for spatial heterogeneity and price variability. Results show that under a corn-soybean crop rotation, precision conservation improves profitability in 22 of 29 fields, indicating potential for adoption without government subsidies.