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Model for Economic Analysis of Fungicide Usage in Hybrid Corn Seed Production

A model was used to determine the economic benefits of using fungicides to control foliar diseases of seed corn. The components of the model were (i) increased net return to the seed company from fungicide usage, (ii) increased income, based on a wholesale price of $30 per unit of 80,000 seeds and a premium of $2 per unit of medium-sized seed, and (iii) increased expenses, calculated as the sum of fungicide and fungicide application costs, cost of processing increased seed, and increased payment to the grower by the seed company. Increased payment to the grower was calculated as the product of increased seed yield (before separation into fractions), May futures price for no. 2 commercial corn on 1 March, and an average inbred production factor. Increased net return was calculated by subtracting increased expenses from increased income. Yield data were obtained from fungicide trial experiments in commercial hybrid corn seed production fields in Iowa from 1990 to 1993. Of 169 fungicide treatments applied, 64 and 79% were profitable to the seed company and to the grower, respectively. The results from this study indicate that fungicide usage in hybrid corn seed production can be economically beneficial.