An economic analysis of potential agricultural adjustments in Reeves County, Texas: A mathematical programming approach with both micro and macro models

Abstract

The objectives of this study were to ascertain the costs of producing various crops and livestock enterprises in Reeves County, Texas and to determine through appropriate analytical techniques, optimum production strategies for producers including any readjustments in resource usage to maximize net farm income. In addition, the effects of various government program initiations and external capital rationing were analyzed for the country. To accomplish those objectives, mathematical programming models were developed for both a representative farm firm and for the entire irrigation agricultural economy of Reeves County. These models were analyzed in the context of both current prices prevailing for the 1971-1972 marketing year, and for the 1968-1969 marketing year. To obtain the necessary budgeting data, a purposive sampling technique was employed, and two surveys of irrigation farm producers were conducted in Reeves County. Analysis of the firm model under 1971-1972 price conditions revealed that upland cotton should be an economically viable crop to produce at all yield levels above 720 pounds. Pima cotton was not a profitable alternative, but stocker heifer enterprises complemented by small grain pasture were a viable alternative for diversification. At an upland cotton yield level of 720 pounds upland cotton production would be limited by any government program which limited government payments below $45,000 to any single producer. ...