Does Yield and Lint Price Variability Affect Feasibility of Transgenic Cotton in West Texas?

The development of transgenic cotton cultivars gave cotton producers more risk management options for insect control and weed suppression.  The insect and weed suppression characteristics of transgenic cotton provide the potential to greatly reduce a common source of production risk for all cotton producers.  At the same time producers were getting all the benefits of transgenic cotton, seed vendors were beginning to charge technology surcharge fees for some portion of the enhanced profit potential brought about by this new genetically customized germplasm.  In this study, a comparison is made between a conventional dryland cotton production system using conventional cultural techniques (i.e. more tillage trips over the field and possibly additional trips for insecticide and herbicide application) and a production system utilizing Bollgard II Round-up Ready Flex technology.  The comparison employs budgets prepared to reflect common production practices for West Texas dryland cotton production.  Stochastic simulation will be applied to the model using forecasted weather, cotton yield, and cotton price.  Stochastic dominance and stochastic efficiency techniques will be used to attempt to determine which production system is superior in the long term under uncertainty, various yield variations, and various lint prices.  We will attempt to determine if this technology provides economically justifiable benefits for adoption in this particular region of Far West Texas and identify the essential production environment characteristics that favor one production system over the other.