This paper tries to study a dynamic ex ante input demand model with application to western Canadian agriculture. The dynamic ex ante input demand model combines the cost of capital adjustment and ex ante output choice to create a dynamic model that is theoretically and empirically appealing. The four input empirical model provided a tractable means of estimating a dynamic ex ante input demand system combined with an ex ante supply function. The application to Western Canadian agriculture resulted in model that was dynamically stable and consistent with profit maximization. The results show that Agricultural capital (machinery and buildings) is a quasi-fixed input, with significant adjustment costs and a slow rate of adjustment. Technological change and machinery investment are energy and material-using for western Canadian agriculture. There is some indication that agricultural wealth lowers the discount rate within the sector has a positive effect on capital investment.

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