Optimizing Irrigation for Cotton Profitability in Texas High Plains

Dany Résolus, Reymark Alcantara, Chenggang Wang, Yuyuan Che, Guo Wenxuan and Adedeji Oluwatola

No 360948, 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO from Agricultural and Applied Economics Association

Abstract: Cotton production in the Texas High Plains—a semi-arid region—is heavily dependent on supplemental irrigation due to highly variable and insufficient rainfall. With increasing water scarcity, optimizing irrigation practices has become essential for improving profitability and promoting sustainable resource use. This study employs a two-stage empirical framework to determine the optimal irrigation level for maximizing profit in cotton cultivation within the region. In the first stage, a fixed-effects panel regression model is estimated using plot-level data from multiple sites and years, capturing the nonlinear relationship between total water supply and cotton yield while controlling for biophysical and climatic variables. In the second stage, the estimated yield function will be embedded in an economic optimization model that incorporates actual cotton market prices and irrigation costs. Preliminary econometric results indicate a statistically significant, concave yield response to total water supply, consistent with diminishing marginal returns. Optimization results are currently under development and will be presented in subsequent versions of the study. These findings highlight the need for data-driven irrigation strategies and supportive policy interventions to enhance the economic and environmental sustainability of cotton farming in semi-arid agroecosystems.

Keywords: Production; Economics (search for similar items in EconPapers)
Pages: 15
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea25:360948

DOI: 10.22004/ag.econ.360948

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