OPTIMAL MARKETING OF NURSERY CROPS FROM CONTAINER-BASED PRODUCTION SYSTEMS

Optimal production and marketing decisions for a nursery producing orn amental plants from a container-based production system are determined . The stochastic dynamic programming model developed captures the exis tence of a value-added, serial-stage production process with multiple products and intra- and interyear dynamics. Results suggest price diff erentials play an important role in determining the optimal size of pl ant to market. Further, federal taxes are important for determining th e optimal production and marketing decisions while discounting and sta te taxes play minor roles. Analysis of the transition probability matr ices associated with the optimal decisions indicate that the long-run behavior of the system can be generalized.