ABSTRACT

Whole farm analysis with a representative farm is specified for linear programming analysis. Alternative scenarios show changes in acreage allocation as prices and yields change. Inclusion of fixed costs allows measures of profit for each solution. Returns to land that are below prevailing rental rates demonstrate low returns for a typical farm. Loan deficiency payments (LDP) enable the farm to have a positive profit in years when commodity prices are low. These payments are important in some years, but market prices are adequate for profitability in other years. Government payments provide a “safety net” for Georgia cotton producers in years with low prices.