The focus of this paper is to examine irrigation as it affects the risk involved with cotton production in the Coastal Bend of Texas. The study is based on a production model using stochastic simulation to incorporate the risk involved with historic cotton yields from a representative farm in the area as well as historic cash, futures, and season average prices. The effect of irrigation on production risk management is incorporated with multiple types and rates of crop insurance as well as hedging strategies with futures and options to provide recommendations to local growers in choosing risk reduction strategies to maximize returns.