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Optimize vs. maximize in ag
Dr. Victor Martin

The Drought Monitor is easy this week. Things are almost identical to last week. As we are still abnormally dry. Unfortunately it doesn’t appear there’s much hope for significant precipitation for our area but a bit of a today and tomorrow. And the cooler temperatures will at least help conditions from becoming worse. The six to ten-day outlook (Jan. 27 to 31) indicates normal to maybe a bit above temperatures and a chance of above normal to slightly above normal precipitation. The eight to 14 day outlook (Jan. 29 to Feb. 4) indicates a strong chance of normal temperatures and below normal precipitation. With days lengthening and wheat ready to resume growth, it will need moisture soon.

Another semester is underway at Barton Community College after a longer than normal break sue to Covid-19. First weeks help everyone to get back in the groove and figure out the semester. In agriculture classes, from fertilizer management to crop production and soils, students have to start considering how to manage production of crops and livestock. One of the hardest concepts for them and all of us to wrap our minds around is the difference between optimum yields and maximum yields. What do producers shoot for and why?

First, what do these words mean?

• Maximize: “make as large or great as possible.”

• Optimize: “make the best or most effective use of (a situation, opportunity, or resource).”

Many people’s first thought is naturally to “maximize” production, to produce the greatest yield possible. However, this is incorrect on several levels for producers unless you want coffee shop bragging rights. Why is this the incorrect way to look at output?

• In production, most outputs are subject to the Law of Diminishing Returns which states: “after some optimal level of capacity is reached, adding an additional factor of production will actually result in smaller increases in output.” In plain English, we are producing a crop and must provide needed inputs (seed, fertilizer, land, etc.) but we have limited resources (only so much land for example). 

You only have so much land and as you add inputs (seeding and fertility levels for example) you will initially see a dramatic increase in production, however, as you seed at a higher and higher rate and add more and more fertilizer, the gains in production will decrease for each unit added and eventually you will not only stop adding yield but actually decrease yield. As you approach that maximum yield, your increasing input levels will result in a smaller and smaller yield increase. For example, to gain that last five bushels you may need to add twenty units of nitrogen where at a lower yield level that 20 units would have increased yields by twenty bushels. You add more and more and get less and less out.  This is not only inefficient economically, resulting in a decrease in profits but potentially harmful environmentally. Producers need to look for the “sweet spot” where marginal costs equal marginal returns. This allows producers to achieve the nest bullet point.

• By optimizing yields, producers can maximize the one thing they should – profits. Maximizing yields decreases profits while optimizing yields maximizes profits. Remember Profits = Total revenue – Total Costs so optimizing inputs, optimizes costs and generates the greatest profit.

Dr. Victor L. Martin is the agriculture instructor/coordinator for Barton Community College. He can be reached at 620-792-9207, ext. 207.