In this paper, a 14-equation model of the United States potato industry is presented. Four of the equations contain endogenous variables lagged one time period. The solution to this system of first-order difference equations is presented to determine the system's stability. The stochastic stability is then investigated by obtaining estimates of the limiting variance-covariance matrix of endogenous variables. This matrix shows the cumulated effect of historical random shocks. This is followed by a similar study of the effect of erratic variation in exogenous variables. Next is a comparative static analysis, comparing actual values of variables with their stationary state values. The impact of the price support program on the industry is analyzed. Impact and stationary state multipliers are computed and short and long run effects of structural changes are evaluated. RELATIVELY LARGE fluctuations of prices and quantities have characterized the United States potato industry during the last three decades. These fluctuations have had a profound effect on growers' income, regional allocation of production, and the economic efficiency of the industry in general.2 The quantitative analysis of the stability properties of the United States potato industry and its stationary states under changing environmental conditions constitute the main objectives of the present study. In addition, the analysis is so designed as to focus on certain questions pertaining to the particular position maintained by California potato growers in the United States market. The method of analysis consists in formulating an econometric model of the United States potato market. Then, having estimated the parameters of the economic structure, a detailed analysis of the static and dynamic properties of the system is undertaken. The comparative static analysis seeks to evaluate equilibrium values of the endogenous variables both in the short and in the long run and to determine quantitatively the effects of conceivable variation in exogenous variables and certain parameters of the structural relations on these values.