Strategies for Wheat Production in the Great Plains*

A sequential decision model is formulated for wheat-fallow decisions on land use. Dynamic programming is used to refine and extend earlier work which used an expected-value criterion. Asymptotic variances and covari-ances of net returns are derived for the Markovian models implied by vari-ous strategies, and these are used to analyze strategies based on the joint criteria of expected value and variance of net returns. A CONSIDERABLE part of the Great Plains is devoted to productionof a single crop, which is wheat. Farmers in this region have only two economically relevant choices for land utilization in a given year-wheat and fallow. Range or other crops are not economically competitive with wheat for use of the land, and moisture limitations make periodic fallowing a common practice. An optimal frequency for fallowing in this region has been the subject of several studies [1, 2, 4, 7]; but that of Burt and Allison [1] was the only one which used a formal optimization model that took into considera-tion the entire planning horizon of the firm