The Potential Impacts of the Use of Southern Oscillation Information on theTexas Aggregate Sorghum Production

Abstract

Economic decision models incorporating biophysical simulation models are used to examine the impact of the use of Southern Oscillation (SO) information on sorghum production in Texas. Production for 18 sites is aggregated to examine the impact of the use of SO information on the aggregate supply curve and other production and economic variables. Two information scenarios are examined. For all expected prices, the use of SO information increased producers? net returns over the scenario in which SO information is not used. Depending on price, the expected Texas aggregate sorghum supply curve using SO information shifted both left and right of the without SO information supply curve. Changes in nitrogen use based on the SO information is a major factor causing the shift in the supply curves. Further, the use of SO information decreased aggregate expected costs per metric ton of production. Changes associated with the use of SO information can be summarized as follows: the use of SO information provides producers a method to use inputs more efficiently. This more efficient use has implications for both the environment and for the agricultural sector.