Optimal Crop Rotation of Idaho Potatoes

Abstract

Idaho’s potato growers face increasing price and production risks as the potato industry undergoes structural change. In response, producers have shortened potato crop rotation to counteract the price risk. A risk-neutral discrete stochastic sequential programming (DSSP) model was developed to analyze the affects of the shortened rotation on expected revenue with incorporated price and production risks. The results support the following conclusions: land constraints due to equipment, labor, and capital efficiency alter optimal rotations; given no land constraints, a whole farm 607.3 ha simulation yields the same results as a per-hectare analysis with Potatoes-Wheat-Wheat-Potatoes being the optimal rotation; and longer rotation cycles generate the highest expected revenue per-hectare. Additional conclusions were that the open market generates higher expected revenue when compared to contracts; producers can counteract some of the loss of expected revenues in the contracted market with lower production risk from longer rotation cycles; Idaho potato producers may not be operating at a risk-neutral level.