Abstract

The use of perfect and imperfect forecasts of sea surface temperature anomalies (SSTA) in the Equatorial Pacific for potato fertilization strategies is presented in this study. The applications of SSTA forecasts and the derivation of probabilities of future events are illustrated considering yield outcomes obtained from the EPIC simulation model at Valdivia, Chile (39.4 S). The economic value of both perfect and imperfect forecasts of SSTA is assessed. The study framework incorporates weather modeling, soil-crop modeling and an intertemporal (i.e. time-dependent) economic decision model. The value of perfect SSTA information is found to be positive for cases where the initial fertilization dose (nitrogen and phosphorous) does not preclude expression of the full yield potential for a different type of growing season. In those situations it would be hypothetically possible to use perfect seasonal forecasts of the SSTA to perform further nitrogen adjustments, which would result in additional net economic returns. In the example shown the values ranged from 5 to 22 $/ha depending on the initial fertilization strategy. Imperfect forecasts also produce interesting results when they are used in an intertemporal decision framework. Use of simple forecasts derived from the stochastic properties of SSTA allows the decision maker to capture part of the value of perfect SSTA information. For the case considered here this value was up to 40%. If selected initial fertilization levels are not optimal, nitrogen adjustments based on a simple Markov Chain forecast increase net economic benefits. These additional economic benefits vary between 3 and 10 $/ha in the example, being approximately 60% of the value of perfect SSTA information. © 2004 Elsevier Ltd. All rights reserved.