A dynamic optimization model with a carry-over nitrogen residual function and an initial condition on nitrogen availability is used to derive and evaluate optimal decision rules of nitrogen application for cotton production in the Southern High Plains of Texas. Using actual cotton and nitrogen prices, short-run and long-run simulated optimal levels of nitrogen application are used to derive associated optimal cotton yields. Using regression techniques, actual cotton yields are regressed against simulated cotton yields to find out if Southern High Plains of Texas cotton producers follow a short-run or a long-run nitrogen application criteria.