STOCHASTIC DYNAMIC OPTIMIZATION AND RANGELAND INVESTMENT DECISIONS

One of the most uncertain resources for a western beef cattle ranch is the availability of reliable spring forage. The impact on ranch equity position and income variability of investments in crested wheatgrass seedings designed to stabilize spring forage supplies is examined. Expected ending net worth under stochastic forage production and cattle prices is maximized subject to secondary safety-first objectives. Seedings increase expected ending net worth and increase annual net ranch incomes after plant establishment.