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RISK REDUCTION THROUGH OPTIMAL GRAZING SCENARIOS FOR LIVESTOCK/FORAGE
                                       SYSTEMS IN TEXAS PANHANDLE


                Key Words:  Relative Risk, Ogallala Aquifer, Crop-Livestock Systems,

               Wheat
               JEL Classification Codes: Q12, Q15, Q20, Q24, Q25

                       Introduction


                       Agriculture  in  the  Texas  Panhandle  region  relies  heavily  upon

               irrigation. By 1980, irrigated acres in the region reached 1,754,560.  However,
               between  1980  and  1997  irrigated  acres  declined  to  1,363,438  acres  as  the

               water  availability  in  the  Ogalalla  aquifer  declined  and  pumping  costs
               increased. A variety of entities compete for Ogallala aquifer water, including

               municipal, industrial and conservation interests.  Irrigated acres in the region
               are therefore expected to continue to decline in the long-term due to economic

               or political forces. Decline in irrigated acreage will result in increasing acreage

               dedicated to dryland production systems. Additional factors may contribute to
               a focus on dryland systems. Significant acreage in the Panhandle is enrolled in

               the Conservation Reserve Program (CRP), and many producers are evaluating
               land use as they anticipate the expiration of CRP enrollments in the next few

               years. Specifically, producers must choose between retaining dryland forages,
               or converting CRP acreage to dryland grain, or other forage-livestock options

               as  they  consider  CRP  land  alternatives.  Decision  aids  related  to  optimum

               forage system management are therefore in demand.
                       Precipitation  in  the  region  is  highly  variable.  In  Amarillo,  the  annual

               average precipitation over the last 60 years is 19.7 inches (NWS, 2009). However,

               the range in annual precipitation is  from less than 9 inches to  over 40 inches.
               There  are  pronounced  year-to-year  variations  with  as  much  as  15  to  20  inch

               differences in consecutive years. A seasonal pattern adds to the variability. Over
               50% of the annual precipitation is received from May through October.  Regional

               dryland  systems  therefore  face  significant  production  risk  and  are  aided  by
               decision and management tools.


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