The objective of this paper is to examine the effects of underwood crop growing on the optimal
forest harvest decision under conditions of uncertainty in timber price, and develop adaptive management
strategies for an agro-forestry system composed of poplar (populus) and button mushroom
(Agaricus bisporous). The methodology for an adaptive management decision under stochastic timber
price is based on stochastic dynamic programming. We will demonstrate that the reservation price
strategy remains optimal and planting button mushroom under poplar makes the reservation price
for tree harvest higher than that in pure forest.