This study utilizes a dynamic programming decision model, considering an intertemporal nitrogen carryover function, combined with both linear stochastic and deterministic plateau response functions to evaluate optimal nitrogen fertilizer decision rules and net present values (NPVs) in Texas High Plains cotton production. Nitrogen recommendations and NPVs are influenced by response function choice and nitrogen-to-cotton price ratios. Results indicate the stochastic plateau function better describes the data; the optimum nitrogen recommendation is to apply approximately 40 lb. of nitrogen for each bale of cotton production when considering nitrogen carryover information.

Production function models for cotton lint yields, seed yields, turnout, and lint quality characteristics are developed for the Texas High Plains. They are used to evaluate the impacts of quality considerations and of climate/weather information on the management decisions and on the profitability and risk of irrigated cotton production systems. It is concluded that both quality considerations and improved climatic/weather information could have substantial effects on expected profitability and risk. These effects mainly occur because of changes in optimal variety selection and irrigation water use levels. Quality considerations in particular result in significantly lower irrigation water use levels regardless of the climate/weather information assumption, which has important scarce-resource use implications for the Texas High Plains.

Agriculture in the Texas High Plains depends entirely on the Ogallala Aquifer. Texas enacted water conservation legislation to address declining reserves in the aquifer. We developed an integrated regional water policy model that links a hydrology model with an economic optimization model to estimate policy impacts with respect to economic cost and water conservation. Testing the effectiveness of two policies, a groundwater extraction tax and extraction quotas, we observe that neither significantly inhibits groundwater use. Although both policies conserve similar amounts of groundwater, the regional cost of the tax policy to agriculture is more than the quota policy.

The purpose of this paper was to quantify economic and energy use implications of new improved irrigation and limited tillage production systems for the Texas High Plains. Per hectare uses of natural gas and electricity under alternative irrigation distribution systems for corn, sorghum, wheat, cotton, and soybeans were utilized to estimate total amounts of natural gas and electricity used in the production of these crops on the High Plains of Texas. The amount of diesel fuel used was estimated for conventional and limited tillage systems under dryland and irrigation production. Total amounts of water used for the five crops under the improved and conventional irrigation systems were also estimated for the High Plains. Results indicated improved irrigation and limited tillage systems reduced energy and water use on the High Plains. Total natural gas and electricity were estimated to decline over 20 percent, diesel fuel declined 32 percent, and water use for irrigation declined about 23 percent. Use of the improved irrigation and limited tillage production systems was also shown to significantly increase annual net returns to farmers ($40.0 million or 13.3 percent).