Optimal Design of Guayule and Guar Supply Chains for the American Southwest

Abstract: The changing climate and the effects of a growing population are causing an increasing agricultural drought in the American Southwest. Water scarcity has increased the importance of the introduction of drought-tolerant and low-water-use crops that can yield high-value products, such as guar (Cyamopsis tetragonoloba L.) and guayule (Parthenium argentatum A.). However, the guar and guayule supply chains still require a scale-up to profitable production. In this paper, an extension of the optimal design of guar and guayule supply chains is performed for American Southwest, i.e., New Mexico, Northwestern Texas, and Arizona. All farms within this region are evaluated and specific cotton (Gossypium hirsutum L.), grains, and oilseeds farm groups are identified as candidates for guar and guayule adoption. A multi-objective stochastic optimization model is applied to assess the economic, environmental, and social impacts of the guar and guayule supply chains and to address the adoption rate uncertainty through stochastic scenarios. The results for guar show that the optimal processing facility locations for New Mexico and Texas are in Quay County and Howard County, respectively. The results for guayule show that the optimal processing facility location for Arizona is in Pinal County. To identify the effects of a long-term increase in the guar and guayule demand, sensitivity analyses are performed for multiple optimal facility locations.