SPECIALIZATION AND FLEXIBILITY CONSIDERATIONS IN A POLYPERIOD FIRM INVESTMENT MODEL

A 20-year polyperiod linear programming model was developed for a representative eastern Nebraska farm maximizing discounted net returns. The objective centered on determining optimal investment behavior under varying livestock prices. A constant-price model employed constant hog and cattle prices while two cyclical-price models were based upon a 10-year cattle and a 5-year hog price cycle. The initial restrictions were 320 acres, $10,000 of capital, and 2080 hours of labor. Programming activities included crops, swine, cattle feeding, long- and short-term capital borrowing, labor hiring, land purchase, and other features. Four specialized cattle facility investments were included varying in their capital and labor requirements and length of asset life. Both conventional and environmentally regulated swine facility investment activities were included. In addition, a flexible livestock facility investment was provided should the optimal operating strategy include year-to-year adjustments between swine and cattle. The results for the constant-price and cyclical-price models followed a trend of early large swine investments followed by increasing land ownership. Solutions to the three models did not include cattle feeding nor the flexible livestock facility investment. A slight response to the hog price cycle was observed in the timing of hog investments when the constant and cyclical-price models were compared. Un modele de programmation lineaire, comportant plusieurs periodes echelonnees en vingt ans, a ete developpe pour une ferme representative dans ľesl du Nebraska. Ce modele escomplait des revenus nets maximum. ľobjectif viseetait de determiner quelle serait la meilleureforme ďinvestissement dans un cas ou le prix de betail subirait des variations. Un modele a prix fixe utilisait des prix stables pour le pore et le betail, alors que deux modeles a prix cyclique etaient bases sur une echelle de prix de dix ans pour le betail et cinq ans pour le pore. Les restrictions initiates etaient les suivantes: 320 acres, un capital de $10,000. et 2,080 heures de travail. Les activites de programmation incluaienl les recoltes, le pore, ľempruni de capital a long el a court terme, ľemploi de la main ďoeuvre, ľachat de terrain, el ďautres caracteristiques. Les investissemenls incluaienl quatre installations specialisees pour le betail, variant selon le capital, la main ďoeuvre requise el la duree de vie. Les activites ďinvestissement incluaienl des installations pour le pore a la fois conventionnelles et conformes a des regles ďenvi-ronnement. De plus, un investissemenl flexible etait prevu pour une installation du betail, venant le cas ou la meilleur strategic dans les operations incluerait des ajuste-ment annuels enlre le pore el le betail. Les resultats obtenus G partir des modeles a prix constant et a prix cyclique ont demontre une tendance a des inveslissemenls precoces el abondants dans le pore, suivis ďun accroissement dans la possession de terrain. Les solutions des trois modeles n'incluaienl ni la nutrition du betail ni ľinvestissement flexible pour une installation du betail. Lorsqu'on a compare les modeles a prix constant et cyclique, on a pu observer une faible reaction au cycle de prix du pore, selon le moment choisipour investir dans le porc