Abstract
Potatoes are a major commodity for the United States as well as Idaho. However, growing potatoes comes at a cost of diminishing soil quality. Diminished soil quality can impact profits due to decreased yields and quality. Crop rotations help potato growers maintain soil quality while focusing on maximizing average annual returns. Through linear programming optimal crop rotations are found for maximizing net present value. These optimal crop rotations are then run through a Monte-Carlo simulation to characterize the price risk of these different rotations. The linear programming and Monte-Carlo models are also compiled into a simple dynamic functional excel tool.
It is found that all of the top five-year crop rotations in NPV consist of potatoes in the first, third, and fifth years. There is little difference in the NPV of these top crop rotations. As potatoes consist of the majority of the rotations’ NPV what is grown in the years without potatoes has little impact on the total NPV. This indicates the importance of the crops grown besides potatoes having a positive impact on the soil health and in turn having a positive impact on the yields and quality of the potato harvest. The monte-carlo simulation results in small difference in the price risk of these different crop rotations. This again supports the importance of the other crops impact on potatoes as there is no significant difference in the price risk of the varying crop choices. The dynamic excel tool created will be able to further this research with more information on what the impact crops have on each other in terms of the quality and yields. This tool will be able to be used by researchers to further the research done within this thesis, as well as by producers as a decision-making tool for helping to find the crop rotations that will maximize NPV.